Why automotive-industry players must rethink sales incentives

Incentives have spurred automotive sales for decades. But the pandemic has shaken the automotive landscape to its core and, even in this highly dynamic sector, nobody could have predicted its dramatic impact across the industry. 

The shutdown of manufacturing lines along with a rampant chip shortage created new challenges for OEMs, with demand exceeding supply. Constrained supply chains, however, are temporary problems. But it has shown that manufacturers can pivot to new operational models, such as built-to-order, and achieve record profitability as consumers are willing to wait for the cars they want. 

All this means traditional sales incentives have been rendered nearly obsolete, as automotive brands simply do not require them as they did before. And with new market entrants providing unique buyer experiences, consumer expectations are transforming. Forging and maintaining brand relationships now hinges less on price discounts and more on total value to customers. 

This presents a unique opportunity for auto manufacturers and dealerships to rethink incentives for this new and evolving marketplace. Personalization and transparency are essential tools, especially when employed with a decreased emphasis on cost. The best approach is one that allows consumers to get to the point by knowing the price beforehand, allowing them to settle into the buying experience. This is where the brand can focus on making an impact with the right incentive strategy.