Edmunds.com Reports True Cost of Incentives for October: Incentives Up Twelve Percent Over Last Year
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 $2,257 per vehicle sold in October 2006, down $431, or 16 percent, from September 2006, but up $245, or 12 percent, from October 2005.
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 aggregate incentives spending are estimated to have totaled approximately $2.8 billion in October, down from $3.6 billion in September. Chrysler, Ford and General Motors (GM) spent an aggregate of $2 billion, or 72 percent of the total; Japanese manufacturers spent $484 million, or 17 percent; European manufacturers spent $208 million, or eight percent; and Korean manufacturers spent $89 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,129 per vehicle sold in October, down from $3,687 in September 2006. Compared with last month, Chrysler's incentives spending was up $3 to $4,214 per vehicle sold; Ford's incentives spending was down $845 to $3,278 per vehicle sold; and General Motors decreased its incentives by $676 to $2,497 per vehicle sold.
"Chrysler is offering generous incentives to move the 2006 inventory off their lots, while Ford and GM continue to reduce incentives and make the most of value pricing," remarked Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com.
From September to October, European automakers decreased incentives spending by $147 to $2,419 per vehicle sold; Japanese automakers decreased incentives spending by $300 to $1,074 per vehicle sold; and Korean automakers decreased incentives spending by $105 to $1,715 per vehicle sold.
Comparing all brands, in October Scion spent the least, $66, followed by Honda at $285 per vehicle sold. At the other end of the spectrum, Jeep spent the most, $5,763, followed by BMW at $4,285 per vehicle sold. Relative to their vehicle prices, Jeep and Dodge spent the most, 20.7 percent and 13.7 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.4 percent and 0.8 percent, respectively.
Among vehicle segments, large SUVs had the highest average incentives, $4,800 per vehicle sold, followed by large trucks at $4,564. Compact cars had the lowest average incentives per vehicle sold, $584, followed by sports cars at $942. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 14.8 percent, followed by large SUVs at 12.7 percent of sticker price. Luxury sport cars averaged the lowest, 2.2 percent, followed by sports cars at 3.3 percent of sticker price.
“Even though fuel prices have remained relatively low for a number of weeks, most gas-guzzling vehicles require generous rebates to catch the attention of consumers,” observed Dr. Liu.
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 three Web sites that empower, engage and educate automotive consumers and enthusiasts. Edmunds.com (www.edmunds.com), the premiere 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 January 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in February 2006 and is an automotive lifestyle social networking Web site for anyone with an interest in automobiles. The company is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.
