Incentive - September 2008 - (Page 50) repurposing of existing incentives, or partnering with other co-partners and suppliers to get the positive fit you wouldn’t necessarily think of to be connected with an auto manufacturer.” These could include a tire manufacturer partnering with an automaker to help offset the cost of those incentives. Swary anticipates a repurposing of some of the incentives that may be out there under other programs to support these types of solutions. Cash sticks to the hood Jesse Toprak, executive director of industry analysis with Edmunds.com, a consumer automotive Web site, does not Consumers Employees Dealers Sales Team do you want to knock them off their feet? Motivate them all with the help of Sony’s Online Premium Incentive Resource Center. One simple click gives you complete access to the latest knowledge and must-have products to motivate each of your unique audiences, with: I Monthly updates on new and exciting program ideas I The latest product offerings from Sony I How-to guides for all of your incentive programs I Calendar of events to see Sony’s products visit incentivemag.com/sony Sony. A brand everyone knows for rewards everyone loves. agree with Swary. “Fuel-price incentives, just from the manufacturer’s perspective, are actually very smart,” he says. “The average price for them is some three hundred dollars per year on a vehicle. From their standpoint it’s cost effective. It creates buzz and is not as costly. Anything with the word ‘gas’ in it gets excitement.” Gasoline incentives are one thing. But do automakers’ traditional cash incentives, including zero-percent financing, hurt dealers and auto companies in the long term by making people come to expect cash incentives and factor them into their opinion of the “value” of a car? Mike Mackey, a salesman with Mike Addy Chrysler-Jeep, in Lexington, S.C., says that in the long run customers come to expect the cash rewards and bonuses. “It’s a fact that we paint ourselves into the corner, making it hard to get out of offering such rewards all the time,” says Mackey. “We’ve relied on them so long that if we take them away, people just quit buying completely until we start coming out with them again, because they’ve grown so accustomed to them.” “Consumers are taking these incentives for granted, and once you offer an incentive, it’s impossible to take it back without a decline in sales,” says Toprak. “The only way to justify removing an incentive is when an automaker redesigns a vehicle, coming up with a different value proposition; if the car’s exactly the same and incentives are simply taken away, that doesn’t work. It has become a vicious circle.” The traditional cash rebates also have a negative impact on the resale value of vehicles, according to Toprak. This directly lowers the sale price of the vehicle when it’s purchased new, and in turn, directly impacts resale of the car in the marketplace. For example, due to low demand, dealerships might discount a $30,000 Dodge Durango by Continued on page 52 50 | Incentive | September 2008 | incentivemag.com http://Edmunds.com http://incentivemag.com/sony http://incentivemag.com/sony http://incentivemag.com
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