Toyota’s discounts drive US auto sales rise

US autos Apr10.pngThe blog is always grateful for good news, no matter the reason. Thus it welcomes March’s rise in US auto sales to 850k from February’s 615k (black line).

The driver for the rise was Toyota’s (red line) record level of price discounts, as it aimed to overcome its disastrous sales slump after the quality problems. Its “incentive spending jumped 44%, or nearly $700 a vehicle, to $2,256“. In addition, all returning customers (60% of its sales) “were given two years of free maintenance“.

Other manufacturers were forced to respond, taking the average level of discount to $2800 per auto. GM offered the highest incentive of $3500.

But even so, the annualised sales rate was still only 11.8m, well below the 15m-17m range seen between 1995-2007. With each auto using $2973 of chemicals, according to the American Chemistry Council, this meant the market is currently worth just $35bn, versus its peak of over $50bn.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. Paul is also an invited member of the World Economic Forum’s Global Agenda Council. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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