Incentives Are Fueling U.S. Auto Sales, Wells Fargo Analysts Say

U.S. auto sales may have plateaued and are being increasingly powered by incentives, Wells Fargo & Co. analysts wrote in a research report on Thursday.

The average new vehicle incentive has risen to 7.9 percent of a vehicle’s market value, as of March, compared with 7.2 percent in the same month a year ago, analysts led by John McElravey wrote. Incentives such as rebates have been rising as sales lose steam. New U.S. vehicle sales fell in May, marking the second monthly decline this year.