Japanese automakers ready to roll out the deals in fall price war


MONEY-SAVING MOMENT: I’ve been saying for months to hold off buying a new car if you can. Now it looks like the rewards are just around the corner.

The Japanese automakers that had their production dashed by the earthquake and tsunami earlier this year are now getting back up to speed. And they’re ready to deeply discount to get back in the game!

Toyota is just now back at 100% production in North America, which is earlier than expected. I suspect they’ll do a lot to get their lost market share back, even at the loss of margin or selling cars at no profit at all. (Traditionally, Japanese cars have accounted for 40% of our domestic auto market. Right now though, they’re sitting at some 28%.)

Put yourself in Toyota’s shoes for a moment: First, they had those pesky safety issues, followed by a cover-up that undermined the long-term credibility of their brand. People no longer trust Toyota and it will take years to rebuild their once sterling reputation.

Then on top of that, they were hit with the terrible consequences of the earthquake and tsunami. So even if people trusted them, they don’t have the product to deliver! Drive by a Toyota dealer and you’ll see the lots are looking thin.

But this will all change in the next few weeks. This fall will see a major build up of Japanese auto inventory and the Japanese automakers will fight for every sale. You better believe that other automakers who took market share away from the Japanese will be discounting too if they need to.

It all adds up to a classic market share and price war. My best guess is the price war will heat up in late October. Halloween will be a treat instead of a trick. And it will continue to be a treat for months to come. The loss of confidence in the U.S. economy means people will put off big purchases like cars. So if you can zig while others zag, you’ll find some real bargain times coming not too far in the future.

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