FOR IMMEDIATE RELEASE
Edmunds Price Index (EPI) Reflects Bargains in Minivan, Truck and SUV Segments; Analysts Predict Rising Interest Rates Will Affect Incentives Offers
SANTA MONICA, CALIF. - July 12, 2004 - Edmunds.com, the premier online resource for automotive information, reported today that the Edmunds Price Index for new vehicles (EPI-N) (January 2002 = 100) decreased 0.8% from 99.4 in May to 98.6 in June.
Edmunds.com believes that this decrease was primarily the result of the gas price hike, which inhibited demand for the large truck, minivan, and large SUV segments; their indices fell 3.0%, 2.1% and 1.5% respectively. Compact SUVs experienced the largest increase, 1.1%, followed by luxury sport cars at 1.0%.
"Larger vehicles lost sales momentum when consumers saw gas prices climb, and the interest rate hike seems to be having a psychological effect of its own," said Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "Consumers are responding to high-profile financial trends when making car-shopping decisions despite the fact that both these events have minimal financial implication for most people. However, if interest rates continue to rise, subvented APRs and leases will become much more expensive for automakers. In that event, it will become even more important that they optimize the cost-effectiveness of their incentives programs."
Edmunds.com predicts that in the coming months there will be a gradual increase in industry average days-to-turn, which measures how many days on average it takes to sell vehicles after they arrive at dealerships. In June, the average was 69 days, compared to 64 in May 2004 and 69 in June 2003. Of all brands, Oldsmobile had the longest days-to-turn at 144, followed by Isuzu at 110. The quickest inventory turnaround was for Scion at 16 days, followed by Mini at 23 days.
In June 2004, the sales-weighted average new vehicle sticker price was $29,220, $35 lower than in May 2004 but $634 higher than in June 2003. The sales-weighted average net price was $24,501 — 16.2% below MSRP, the greatest difference since August 2003. Large SUVs currently have the largest discount of any category at 21.8%, while luxury sport cars have the smallest at 6.6%.
Similar in purpose to the Consumer Price Index (CPI), the EPI-N measures the average changes in retail prices for new vehicles with fixed options over time in order to analyze trends. Edmunds.com also calculates and reports a wide range of data including transaction prices and net prices of vehicles by country of origin, manufacturer, make, model and vehicle segment.
About Edmunds.com, Inc.
Edmunds.com is the premier online resource for automotive information. Its comprehensive set of data, tools and services, including Edmunds.com True Market Value® pricing, is generated by Edmunds Data Services and is licensed to third parties. For example, the company supplies over 800,000 pages of content for the auto sections of AOL and NYTimes.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts. 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 StudySM and was ranked first in the Survey of Car-Shopping Web Sites as reported by The Wall Street Journal. The company is headquartered in Santa Monica, Calif. and maintains a satellite office near Detroit.