Power Information Network Reports: Incentives and Retail Prices for New Vehicles Increase in May

WESTLAKE VILLAGE, Calif. June 7, 2004: New-vehicle incentives and retail prices both increased in May compared with a year ago, according to actual retail transaction data from the Power Information Network (PIN), LLC, an affiliate of J.D. Power and Associates.

The average new-vehicle incentive amount in May (including all incentive categories) was $2,879 -- up almost 7 percent versus April and up 2 percent compared with May 2003. Despite these increases, new-vehicle retail prices (less rebates) rose as well. The average price consumers paid for a new vehicle in May was $25,651 -- up from $25,415 in May, 2003. The average price of $25,651 is based on new cars selling at an average of $23,103 and new trucks at $27,621 -- each up 0.5 percent from May 2003.

"Incentives are certainly robust and continue to escalate, but the manufacturers are managing to slightly increase their actual prices," said Tom Libby, director of industry analysis at PIN. "These trends vary substantially among the manufacturers and nameplates."

Used vehicle prices rose more than new-vehicle prices in May. Increased prices, combined with a decline in days-to-turn for used vehicles -- the number of days the vehicle sits on the dealer's lot -- indicate a strengthening of the used vehicle market. Used vehicle prices increased to $15,607 in May -- up 3.6 percent year-over-year. Prices of used light trucks climbed 5.3 percent, and used cars increased 2.5 percent.

ABOUT POWER INFORMATION NETWORK

PIN's automotive solutions are based on the collection and analysis of daily new and used vehicle retail transaction information from automotive franchises. More than 250 details from individual new-vehicle purchase transactions are aggregated, cleansed and analyzed to help dealers, manufacturers, and financial institutions better align sales, marketing and product distribution strategies. PIN's industry-leading automotive solutions incorporate consumer demand and sales information to improve results in product planning, marketing, sales, and vehicle production and distribution processes for its customers including pricing, revenue management, incentives optimization, and vehicle remarketing. www.powerinfonet.com.

ABOUT J.D. POWER AND ASSOCIATES

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. www.jdpower.com.