Edmunds.com Reports Automakers' True Cost of Incentives Decrease Over 5%

SANTA MONICA, Calif., Dec. 18, 2003 -- Edmunds.com ( http://www.edmunds.com/ ), the premier online resource for automotive information, reported today that the average manufacturer incentive per vehicle sold in the United States was $2,386 in November 2003, up $518 or 27.7% from November 2002, but down 5.4% from October 2003.

  (Logo:   http://www.newscom.com/cgi-bin/prnh/20031009/LATH011ALOGO)

Edmunds.com's monthly True Cost of Incentives(SM) (TCI(SM)) report takes into account all of the manufacturers' various United States 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.

Incentives spending for domestic Chrysler, Ford and General Motors nameplates fell 2.6% from $3,445 in October to $3,355 in November. Chrysler reduced incentives spending by 6.0% to $3,365 per vehicle and experienced a market share decrease of 0.3%. General Motors reduced incentives spending by 0.9% to $3,611 per vehicle and gained almost 1% of market share. Ford reduced incentives spending by 4.0% to $2,964 per unit, its lowest level in seven months, and saw its market share decrease in November to 18.6% of the total U.S. market -- one of its lowest levels ever -- compared to 19.9% in October.

In contrast, Mini and Scion had essentially no incentives in November, while Lexus spent only $153 per unit, Land Rover spent $321 and Acura spent $330.

"Scion is new to the marketplace, while Mini closely manages supply in relationship to demand. The three other manufacturers with low incentives costs each introduced a major redesign of a vehicle that comprises more than a third of its total sales volume, and priced it at a level the market is willing to accept, capturing new car buyers without the need for incentives," explained Dr. Jane Liu, Executive Director of Data Analysis for Edmunds.com.

In November, European automakers spent $1,608, Korean automakers spent $1,440, and Japanese automakers spent $749 per vehicle sold.

Among vehicle segments, large cars had the highest average incentives last month at $3,775, followed by large SUVs at $3,665 and vans at $2,820. Luxury SUVs had the lowest average incentives at $1,366, followed by sports cars at $1,638 and compact SUVs at $1,806. Large trucks have gained the most market share since November 2002, increasing from 12.3% to 13.9% of the market, while midsize cars have lost the most market share during that period, down from 18.6% to 16.4%.

Industry average 'days-to-turn,' which measures how many days on average it took to sell vehicles after they arrived at dealerships, was 62 days in November, compared to 69 in October 2003 and 54 in November 2002. The quickest inventory turnaround was for Mini and Scion at 16 days, followed by Lexus at 21 days.

About Edmunds.com True Cost of Incentives(SM) (TCI(SM))

Edmunds.com's TCI(SM) 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.