How Did Nissan Achieve Their July Sales Bump? They Bought And Paid For It

Implications: Domestic auto sales are expected to drop over 14% when August sales results are announced on Wednesday. Last month industry observers marveled that Nissan was the only one of the Big 6 automakers that showed a sales increase. How did they do it? They bought and paid for it.

Analysis: Last month,  industry observers marveled that Nissan was the only one of the Big 6 automakers to post an overall sales increase. An increase that helped it garner record high market share.

So how did Nissan do that when the U.S. auto industry is in such a slump that even industry darling Honda, previously bucking the trend, went down with the market as well?

Simply put, Nissan's sales increase and higher market share were bought and paid for.

Nissan brand sales climbed 9.9% to 88,070 vehicles sold, led by its cars.

But those sales came at a price. Since incentive figures usually lag sales results by almost thirty days, it wasn't until today that we saw that Nissan spent more on incentives in July-an average of $2,329 per  vehicle sold-than it had since August 2007. Nissan also outspent other mainstream Japanese, Korean and German brands.

In addition, Nissan outspent import as well as domestic competitors in key car segments, specifically subcompact and compact, where its sales surged and in the midsize segment, where sales held strong.

Nissan is expected to buck the industry's downward sales trend again in August, when it reports sales Wednesday. Nissan is expected to sell 98,000 vehicles in August, up 2.3% from August 2007 and 2.5% from July. Nissan's market share is expected to be 7.8% in August, up from 6.5% in August 2007 but down from 8.4% in in July 2008.

The question will be: at what cost?