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Infiniti, Mercedes, and Lexus Lean On Incentives To Move Sales

Mercedes G-wagen stuck in mud

Mercedes G-wagen stuck in mud

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Even luxury auto brands who once scoffed at the domestics' unseemly hood-slammin', dollar-dealin' pleas are now leaning on big incentives in hopes of reducing swelling inventories. Mercedes incentives averaged $4,185 this February according to Edmunds, an amount nearly double the brand's amount from February one year ago. Lexus incentives rang in at $3,402 per vehicle, four times its average incentive from one year ago.

Underscoring the obvious, Edmunds' Jessica Caldwell claims that "everyone is fighting for market share because there are fewer buyers in the marketplace." Edmunds data includes cash rebates, dealer cash, APR programs, and leasing subvention (automaker-subsidized leases, resulting in cheap monthly payments that come back to haunt the automaker when the lease term expires). Analyst Art Spinells of CNW Marketing Research claims that roughly half of all current leases are subvented.

None of us are very surprised to see bleeding brands like Chrysler offer up incentives (on top of incentives, on top of incentives) like their recent Employee Pricing Plus Plus, which can end up shaving $7,000-plus off the price of a lingering 2008 model Chrysler vehicle. Plus a HEMI V-8 for no additional charge if you buy a Dodge Ram before the end of March (didn't you know March is Dodge Truck Month?).

But when even toney luxury brands struggle to sell cars to affluent consumers who often weather market twists and turns without much pain, it doesn't paint a good picture for market health in 2009.

[source: Automotive News]

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