If imitation is the sincerest form of flattery, then Hyundai Motor America marketing executives should be blushing bright red as General Motors Corporation and Ford Motor Company followed it today with buyer payment protection plans that emulate its breakthrough Hyundai Assurance Program that has boosted sales by at least 10% in Hyundai’s estimation.
In the face of frightening U.S. sales declines in February that made it the lowest February sales on record going back to 1967, automakers are desperately trying to reassure customers that now is the time to buy with a variety of incentive packages. (February year-over-year comparisons ranged from -53% at GM, -48% Ford, -44% Chrysler, and -35 to -37% at Toyota, Honda and Nissan.) Auto sales in the first two weeks of March were down 40% compared to a year ago, and running at a dismal annual rate of 9.2 million units, according to J. D. Power and Associates.
Automakers are increasingly using as an inducement guaranteed-payment of car loans, if the buyer loses his or her job — certainly a very real threat at domestic car companies, if not for workers in the slumping economy as a whole.
A controversial bill has also been introduced in the U.S. House of representatives (H.R. 1550, or the CARS Act) could help kick-start the American automotive market by providing cash incentives of up to $5,000 for those who trade in a vehicle at least eight years old for a limited selection of fuel-efficient products produced in North America. The legislation, as initially proposed, would offer the biggest tax credits for U.S.-made vehicles, though products made in the NAFTA countries, Canada and Mexico, would also qualify. (more…)