Slowing U.S. auto sales urges Japan automakers to reconsider discounts

Images of Toyota Prius

A second year of slowing development in the U.S. auto market is urging Japanese automakers to look beyond discounts to grow market share and focus more on increasing profitability in their largest market.

Global automakers have been fighting for dominance in the world’s No. 2 market as yearly sales continue to move from a record high 17.55 million vehicles in 2016. Many have turned to price cuts to increase market share in the development segments for SUVs and pick-up trucks, while also supporting sales in the struggling sedan sector.

The costs of U.S. discounting has cut into operating profits at most Japanese automakers, consisting Toyota Motor, and Mazda Motor, where North American incomes are poised to succumb to the 3rd straight year in 2018. Nissan Motor’s profits in the area are on track to succumb to the 2nd successive year.

In an interview previously this month, Nissan CEO Hiroto Saikawa stated the days of its high rewards would end once the automaker discharges stocks of 2017 models by the end of the fiscal year in March, as big discounts were unsustainable in a market where development had stalled.

“Competition for sales will be tough in this environment, and enhancing the quality of sales will be important. We can’t compete just with incentives. We have to raise our marketing and brand worth,” he informed Reuters.

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