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Demand For Cars Stalls Deals

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As car sales continue to rise, analysts say consumer shouldn’t expect major discounts — that is, until Japanese cars storm the market.

During the past few months, car manufacturers have been tightfisted with their incentives, rolling out only a fraction of the sticker-price discounts, cash back offers and 0% interest rates on car loans that they typically advertise this time of year. But this trend might not last for long. Japanese manufacturers are expected to increase their inventory this year, and if that occurs, Toyota, Honda and others could entice consumers with extra promotions in order to boost their sales and market share, says Lacey Plache, chief economist at Edmunds.com.

In 2011, American car manufacturers experienced sales growth, in part, because there were fewer Japanese cars on the lots due to natural disasters, like the Japanese earthquake and floods in Thailand. As reported today, Chrysler Group U.S. sales rose 37% in December, Ford Motor sales increased 10% and General Motor sales are up 5%. Fortunately for car buyers, the restored inventories of Japanese cars will create competition, says Plache, in particular for fuel efficient vehicles, like compact and hybrid cars. The result, she says, could be lower prices and better incentives for those cars in 2012.

As a result, would-be car buyers may want to consider waiting a few months, experts say. Indeed, once the pent-up demand for new cars that has been driving the rise in car sales over the past few months has been met, manufacturers could then roll out more incentives to keep the momentum going, says Joe Wiesenfelder, executive editor of auto news site Cars.com. According to Edmunds.com, consumers deferred nearly 300,000 sales from May to August, and that only about 100,000 “lost” sales have been recovered to date.

Car buyers who need to act sooner can still find discounts, though they shouldn’t expect much in the fuel efficient car sector, says Jesse Toprak, vice president of industry trends at price-tracking site TrueCar.com. The best deals will likely be found on gas guzzlers, like large SUVs, trucks and large sedans, he says. According to TrueCar.com, the biggest current discount is on the Ram 1500, at 16% off the manufacturer’s suggested retail price. (In 2011, the biggest discount on a large truck was 19% off the Nissan Titan’s MSRP.) Meanwhile, discounts on subcompact cars are falling: the Suzuki SX4 is selling at 6% off MSRP in 2012; last year it sold at 8.5% off.

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