By Matthew Keegan
The biggest news at the 2011 Chicago Auto Show wasn’t the new products introduced or the raging blizzard gripping the Windy City. What created the largest buzz was the pronouncement by Hyundai Motors America chief John Krafcik that a price war has broken out between car manufacturers. Krafcik shared his thoughts informally with members of the press while at the auto show, sparking widespread interest as news filtered down to the masses.
GM Discounting
Krafcik’s comments solidified what others have been recently been examining: unusually high incentives are being offered by some manufacturers in a bid to increase sales and grab additional market share. Notably, GM is leading the way, averaging $3,762 off of the price every vehicle sold in the United States in January 2011 according to Automotive News. What’s more, that amount is significantly higher with some brands including Cadillac, which is averaging just over $5,600 off of the price of its models.
Although Krafcik noted that GM started the most recent round of price cutting and those cuts were matched by Toyota, Ford and Chrysler have discounted their cars significantly too. Honda and Nissan are playing the discount game too, which means that each of the Big Six manufacturers are working the incentives angle hard.
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