Luxury Brands Sales Incentives On the Rise

Luxury Brands Sales Incentives On the Rise

The sales race to be the best selling luxury brand in America creates the need for manufacturers to constantly release new models in an attempt to stay as up-to-date as possible. It also creates a large backlog of the previous years models in short order, which is why luxury manufactuers in the States are offering the largest purchasing incentives ever. 

Lexus is leading the way with discounts, this year upping its incentives on cars by 54 percent and on its SUVs by 60 percent, according to Autodata Corp. Mercedes-Benz has increased incentives by 11 percent this year, while BMW has given up the least, increasing its discounts by 6.9 percent. All of these are significantly higher than the 2.2 percent average increase across the industry, proving that luxury brands are fighting the hardest for attention.

Approximately half of luxury transactions are leases, making residual value very important, and also necessitating quick model turnover, as the the companies know that the customer will be back in two or three years time looking for something new. Loyalty incentives are also a large chunk of sales for luxury brands, offering previous owners larger incentives on new cars from the same brand.

Lexus held the sales lead in America for 11 consecutive years, until BMW ousted them last year. The Japanese company has historically offered the least in dealer incentive programs, making this years large increase an obvious ploy to regain the title of top-seller. On each SUV sold, Lexus offered an average $3,734 off, while BMW offered $3,613 on every vehicle sold.

[Source: Automotive News]