Autoblog

The Detroit 3 aren't the only automakers feeling the hurt from lease vehicles coming back worth much less than expected. Leases account for 60% of BMW's sales in the U.S. compared to just 20% of sales in the industry as a whole. As such, BMW will begin offering incentives like never before to encourage customers to buy a vehicle instead and reduce the number of leases it has on the books. In some cases the German brand is offering loans with finance rates as low as 0.9% over five years, and of course these incentives will be aided by a commensurate raise in lease prices, as well.

Nearly all luxury makers are in the same boat as BMW, as Bloomberg reports that leases also comprise 55% of sales at Mercedes-Benz, 43% at Lexus and 42% at Cadillac. While the residual value of luxury vehicles isn't falling quite as fast as SUVs and full-size trucks, the market's shift in preference to smaller, more fuel efficient vehicles means that there is less demand for vehicles that tend to conspicuously consume copious amounts of fuel. Thanks for the tip, Rich!

[Source: Bloomberg]

Chrysler LLC's financial division will no longer be offering leases to U.S. consumers on Chrysler products as of August 1st. The automaker will be holding a conference call with dealers later today to go over the changes and the reasons behind the decisions, but Chrysler spokesperson, Bill Porter, told Reuters "We are shifting our strategy to focus on retail products."

The move comes amidst Chrysler's attempt to get 20 banks to renew a $30 billion credit facility for the automaker's financial arm. The rise in borrowing costs next month will make it more difficult for Chrysler to offer low-interest loans and could spell further disasters on the sales front.

Thanks to all who tipped in.

[Source: Reuters, WSJ]

Toyota unveiled the 2007 Tundra pickup at the Chicago Auto Show earlier this year. The automaker, however, doesn't want potential customers to wait for the new vehicle, which won't arrive at dealerships until early next year.

So the company is spending millions on incentives, low interest rates, and other strategies to clear out this year’s model. According to Edmunds.com, Toyota spent on average $4,485 in incentives on each Tundra its dealers sold last month. That is considerably more than the $2,911 and $700 the company spent in February 2005 and 2004, respectively. The article does point out, though, there was a sales dip on many Toyota vehicles back in February 2006 which may also account for the larger figure.

Financial incentives are not the only strategy the company is using, though. In Chicago, Toyota may have deliberately shown the new model two floors below the current version to prevent people from comparing the two and, again, waiting for next year to make their purchase.

[Source: Express News]