Automakers Tighten Belts and Offer Incentives

By: Anthony Fontanelle

The American economy is not as strong as Americans would want it to be. The housing problem still exists and the price of petroleum fuel is increasing. On top of this, the government looks to be in a locked mode, just watching the action between presidential candidates.

Thus, consumers are left off to cope up with the increasing price of commodities on their own. Automakers are aware of this and they are also aware that the demand for new vehicles is still there, the problem is that people are not as interested anymore due to financial concerns.

The answer of automakers is to tighten up their belts and offer incentives to consumers. These incentives come in different forms depending on the automaker. The Big Three, General Motors, Ford, and Chrysler, have seen their market share dwindling thus they are the most aggressive when it comes to offering discounts to consumers.

Japanese and European automakers though are also feeling the pressure of the downturn in the economy. Thus, even Honda, Toyota, Nissan, and BMW are also offering incentives to consumers. In the past, these automakers offer these incentives only to few vehicles. Today though, the situation calls for drastic measures and automakers are forced to offer popular nameplates with incentives.

BMW, the German luxury automaker seems to have no trouble last year in keeping up with the sales goal that they have set. Last month though, the automaker announced that they would be cutting down on production cost. It is expected that their R&D arm will take most of the blow.

This apparent trouble inside the German automaker looks to be more apparent today. The automaker is offering a $369 monthly lease for the popular BMW 3 Series. Consumers who have been thinking about buying a BMW but were worried about the increasing price of petroleum fuel and the high price of prestigious car brands would consider this period to be the right time to purchase a BMW.

Even Toyota which is not really known to have high-priced vehicles in its lineup is offering a zero percent financing deal for the 2008 Highlander and the 2008 Camry. These two vehicles are very popular in the United States for their fuel efficiency and reliability which is far superior to the durability of .

If Toyota and BMW are offering these incentives for consumers, one could easily infer that the Big Three are offering much aggressive incentive schemes.

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