FOR IMMEDIATE RELEASE
Edmunds.com Reports Automakers' True Cost of Incentives: 2004 Model Year Vehicles Sell at Slower Pace as Incentives Remain High for Year-End Clearings
Santa Monica, CA - November 25, 2003 - Edmunds.com, the premier online resource for automotive information, reported today that the average manufacturer incentive per vehicle sold in the United States was $2,521 in October 2003, up $595 or 30.9% from October 2002, and down 3.9% from September 2003.
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) 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 decreased, falling 4.8% to $3,445 in October compared with $3,618 per unit in September. Chrysler increased incentives spending by 16.3% to $3,581 per vehicle and enjoyed a market share increase of 1.5%. General Motors reduced incentives spending by 4.5% to $3,642 per vehicle, and lost 0.3% market share. Ford's total incentives spending per unit dropped by 15.5% to $3,089 per unit, due in large part to the increasing market share of their less incentivized new 2004 models, in particular the new F-150. Overall, however, Ford's market share decreased 0.9% from September to October.
In October, European automakers spent $1,693, Korean automakers spent $1,666, and Japanese automakers spent $931 per vehicle sold.
Among vehicle segments, large SUVs had the highest average incentives last month at $4,142, followed by large cars at $3,408 and midsize SUVs at $2,954. Luxury SUVs had the lowest average incentives at $1,432, followed by sports cars at $1,473 and compact SUVs at $1,694. Luxury sports cars have gained the most market share since October 2002, increasing from 3.9% to 4.6% of the market, while midsize SUVs have lost the most market share during that period, down from 14.6% to 13.3%.
Industry average 'days-to-turn,' which measures how many days on average it took to sell vehicles after they arrived at dealerships, was 69 days in October, compared to 75 in September 2003 and 51 in October 2002. Saturn had the longest days-to-turn at 159, followed by Isuzu at 123. The quickest inventory turnaround was for Lexus at 16 days, followed by Mini at 17 days.
"Of all new vehicles sold in October 2003, over 44% were 2003 model year vehicles, while only 30% of last October's sales consisted of the outgoing 2002 model year vehicles," stated Dr. Jane Liu, Executive Director of Data Analysis for Edmunds.com. "This was caused by the unusually high level of prior model year inventory still at the dealerships, and will likely create an oversupply of model year 2004 vehicles throughout next year and, subsequently, generate incentives that will help them sell."
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.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 AOL's auto channel and NYTimes.com's auto section and delivers monthly data reports to Wall Street analysts. Edmunds.com was named "best car research" site by Forbes ASAP, is viewed by consumers as the "most useful Web site" according to the J.D. Power and Associates New Autoshopper.com StudiesSM for both 2001 and 2002, 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, California and maintains a satellite office in Troy, Michigan.