Throwing Down the Gauntlet: Discounts on the Rise as Lexus, BMW, and Mercedes-Benz Wrestle for U.S. Sales Crown

By Trevor Dorchies | June 18, 2012
Now is as good of a time as any to purchase a luxury vehicle if you live in the United States thanks to an assortment of discounts. Lexus, BMW, Mercedes-Benz, and Audi are working feverishly to move current product in an attempt to be the top-selling luxury automaker here. In order to achieve this goal, though, each automaker has boosted incentives on its SUVs and cars. Lexus, Toyota's luxury arm, owned of the number one spot in the luxury vehicle segment for 11 years until last year when BMW took over. While Mark Templin, chief of U.S. Lexus, believes his employer won't reach slip back into the number one spot this year, there's still incentives and offers to be had. Lexus has boosted its discounts the most. In particularly, its cars have seen a 54 percent increase in incentives in 2012 while SUV incentives were boosted by 60 percent, i.e., for every SUV Lexus sold last month, the automaker spent $3,734 on incentives and $2,855 per car. This is a trend not usually set by Lexus as the Japanese automaker is usually known for spending the least amount on incentives. Lexus will continue to offer incentives even on volume models like the ES and RX throughout the year but expect these offers to shrink in size as new models are released. Mercedes-Benz is no stranger to offering incentives as its E-Class is notorious for luring customers in with incentives of all types. The ultra-lux S-Class is also known for incentives ,and we expect that trend to pick up the pace for the remainder of the year. Mercedes-Benz will be launching a refreshed S-Class next year so more rebates will be offered on the 2012 model to clear space for the new model. As it stands now, Mercedes-Benz leads BMW by the slightest of margins, holding less than a 2,000 unit lead as of the end of last month.
BMW saw its incentive spending rise by 4.1 percent last month to $3,613 per vehicle sold. Cars alone saw a 10 percent increase in bonuses which cost BMW $4,218 per car sold in May 2012. SUVs saw a 9.4 percent raise when compared to a year earlier, with an average of $2,286 spent in incentives. BMW's loyalty-based incentives, which can bring current BMW owners $1,500 to $2,000 in rebates, have also stimulated sales. Through May of this year, Lexus trails Mercedes-Benz and BMW in sales by close to 18,000 units. Mercedes-Benz has boosted its incentives by 11 percent this year while BMW has inflated incentives by 6.9 percent. The industry average currently sits at 2.2 percent. Not to be forgotten is Germany's other luxury automaker. While Audi has usually taken a back seat to BMW and Mercedes-Benz in sales figures, Volkswagen's luxury brand has also boosted incentives in an attempt to bring in new customers. Audi has increased incentives by 18 percent, $3,553 per car, and 23 percent or $2,261 per SUV sold. With these incentives, Audi is hoping to move 200,000 units a year by 2018 from 117,561 in 2011. It remains to be unseen if the aggressive incentives will result in an abundance of sales for Audi, though. Source: Automotive News (subscription required)