A second year of slowing growth in the U.S. auto market is forcing Japanese automakers to look beyond discounts to grow market share and focus more on boosting profitability in their largest market.
Global automakers have been battling for dominance in the world's No. 2 market as annual sales continue to slide from a record high 17.55 million vehicles in 2016. Many have resorted to price cuts to boost market share in the growth segments for SUVs and pick-up trucks, while also shoring up sales in the struggling sedan segment.
The costs of U.S. discounting has cut into operating profits at most Japanese automakers, including Toyota Motor, and Mazda Motor, where North American earnings are poised to fall for the third straight year this year. Nissan Motor's profits in the region are on track to fall for the second consecutive year.
In an interview earlier this month, Nissan CEO Hiroto Saikawa said that the days of its high incentives would end once the automaker unloads inventories of 2017 models by the end of the financial year in March, as big discounts were unsustainable in a market where growth had stalled.
"Competition for sales will be difficult in this environment, and improving the quality of sales will be important. We can't compete only with incentives. We need to raise our marketing and brand value," he told Reuters.