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Carmakers Spending More in U.S. on Sales Incentives than Production Labor
Carmakers in the U.S. are spending $2,500 on labor to build a vehicle—and more than $3,800 on retail discounts to sell it, according to The Wall Street Journal.
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Carmakers in the U.S. are spending $2,500 on labor to build a vehicle—and more than $3,800 on retail discounts to sell it, according to The Wall Street Journal.
The newspaper cites J.D. Power data about sales incentives and industry statistics concerning labor costs. Power says incentives have equaled more than 10% of the average new-car sticker price for the past eight months.
Dealer supplies of unsold vehicles have grown to an eight-year high of 70 days in spite of the increased spending on discounts, Power says. Carmakers shrug off the elevated inventory levels because of an expected rise in sales activity when spring arrives, the Journal reports.
Car sales in the U.S. have dropped slightly year-on-year for the past two months. Overall volumes remain at near-record highs, but analysts say the numbers show that the market is finally cooling after seven years of continuous expansion.
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