Sales incentive growth clustered around brands with few CUVs, trucks

Wed, 24 Sep 2014

While it's arguably been around the longest, the dominance of the four-door sedan has been under threat for many years. As a further sign of the hurtin' that SUVs and crossovers have put on today's four-doors, a new report from Automotive News points to the increasing use of incentives by brands reliant on cars and light on CUVs and pickups.

Honda, Toyota, Volkswagen and Kia have all been stung by double-digit increases in their incentives-to-transaction price ratio, according to AN, which cites data from TrueCar. Honda's ratio is up 14 percent, while Toyota, VW and Kia are up 18, 15 and 19 percent, respectively.

"Most of the incentive growth we have seen is in product segments with low demand – midsized or large sedans," TrueCar CEO John Krafcik told AN. "As this trend goes on, the brands with three-sedan strategies are going to be in worse shape on incentive spending than the crossover brands."

Krafcik backed up his argument with this fun fact: Honda sales were up just two percent in August, compared to Jeep, whose sedan-free fleet saw sales jump 49 percent in the same period.

The move towards CUVs isn't too hard to figure out, with AN pointing out the increasingly fuel-efficient high-riders that are overtaking showrooms. That's bad news for both sedans and the manufacturers that produce them.

By Brandon Turkus