Nissan Gets the Automotive Price Wars Started

Seven of the 18 Nissan models will be seeing price drops in the United States in the coming weeks. These prices are set as “indefinite” and officially start the price wars that many have predicted in the automotive industry for some time.

Longevity of used cars combined with an up and down economic status have forced many to consider jump starting sales through price reductions. This is different from the standard incentives that manufacturers use to reduce inventories prior to the release of new model years. These price drops will happen from the start and continue to happen as new models are released. The 2014 Versa, for example, has held the title of being the cheapest new car model in America and has reigned below the competition for three years in a row.

Higher-priced vehicles are seeing bigger cuts. The Leaf, Nissan’s electric car entry, dropped the MSRP by $6400 earlier in 2013, while the full-sized SUV Armada is getting a $4400 cut. This isn’t necessarily in response to consumers but is also being done to keep pace with other manufacturers that simply didn’t increase their prices as quickly as Nissan in recent years. As a result, the company has been outpacing pricing and making them a more expensive choice within the individual segments.

This is being done for publicity, of course, but also represents the spark of a trend. Car buyers are out there and Nissan doesn’t want to get left behind over price.

According to TIME:

None of this actually means that Nissan dealerships will be selling cars for less money. The AP noted that the automaker “plans to reduce rebates and other discounts to offset some of the price cuts.” So the changes might prove to be a wash for consumers—who could wind up paying the same as they would have before the price decrease, once incentives and negotiations are factored in.

Time will tell if this turns into increased sales without decreasing profits. If it does, we can expect others to follow.