Edmunds.com Reports True Cost of Incentives for February
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SANTA MONICA, Calif.--Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,253 per vehicle sold in February 2007, down $33, or one percent, from January 2007, and down $95, or four percent, from February 2006.
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all manufacturers' various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.
"The industry’s incentives spend is relatively flat this month,” stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. “Most automakers are following a strategy of steadily decreasing their overall incentives spending, but others are increasing their offers to get the competitive edge at the point of sale."
In February, the industry's aggregate incentive spending is estimated to have totaled approximately $2.7 billion, up from $2.5 billion in January. Chrysler, Ford and General Motors spent an aggregate of $1.9 billion, or 70 percent of the total; Japanese manufacturers spent $530 million, or 19 percent; European manufacturers spent $193 million, or seven percent; and Korean manufacturers spent $107 million, or four percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,035 per vehicle sold in February, down from $3,113 in January 2007. From January to February, European automakers decreased incentives spending by $154 to $2,373 per vehicle sold; Japanese automakers decreased incentives spending by $10 to $1,187 per vehicle sold; and Korean automakers increased incentives spending by $146 to $1,956 per vehicle sold.
| True Cost of Incentives for the "Big Six" Automakers | |||
| Automaker | February 2007 | January 2007 | February 2006 |
| Chrysler Group | $3,526 | $3,855 | $3,771 |
| Ford | $3,084 | $3,378 | $2,829 |
| General Motors | $2,693 | $2,458 | $2,638 |
| Honda | $1,059 | $927 | $335 |
| Nissan | $1,699 | $1,692 | $2,140 |
| Toyota | $1,041 | $1,157 | $1,350 |
Among vehicle segments, large SUVs had the highest average incentives, $3,477 per vehicle sold, followed by large trucks at $3,377. Compact cars had the lowest average incentives per vehicle sold, $942, followed by sports cars at $1,026. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 11.9 percent, followed by compact SUVs at 11.4 percent of sticker price. Luxury sport cars averaged the lowest, 2.1 percent, followed by sports cars at 3.6 percent of sticker price.
“The newer crossovers seem to be overshadowing the compact SUVs that might otherwise appeal to today’s fuel-economy-conscious consumers,” said Michelle Krebs of Edmunds’ AutoObserver.com. “Most of the compact SUV nameplates have been around for quite awhile and there hasn’t been much buzz about them, other than their new incentive programs.”
Comparing all brands, in February Scion spent the least, $78, followed by Lexus at $613 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $6,064, followed by Mercury at $4,863 per vehicle sold. Relative to their vehicle prices, Mercury and Jeep spent the most, 18.0 percent and 15.2 percent of sticker price, respectively, while Scion and Lexus spent the least at 0.5 percent and 1.4 percent, respectively.
About Edmunds.com True Cost of IncentivesSM(TCISM)
Edmunds.com's TCISM is a comprehensive monthly report that measures automobile manufacturers' cost of incentives on vehicles sold in the United States. These costs are reported on a per vehicle basis for the industry as a whole, for each manufacturer, for each make sold by each manufacturer and for each model of each make. TCI covers all aspects of manufacturers' various incentives programs (except volume and similar bonus programs), including dealer cash, manufacturer rebates and consumer savings from subvented APR and lease programs (including subvented lease residual values used in manufacturer leasing programs). Data for the industry, the manufacturers and the makes are derived using weighted averages and are based on actual monthly sales and financing activity.
About Edmunds Inc. (http://www.edmunds.com/help/about/)
Edmunds Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, Calif., and maintains a satellite office in suburban Detroit.
