FOR IMMEDIATE RELEASE
Edmunds.com Reports Automakers' True Cost of Incentives: European Automakers Expand Incentives But Not Market Share; Minivan Incentives Intensify as Crossovers Grab Consumer Attention
Santa Monica, CA - March 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 $2,135 in February 2003, up 10% from $1,939 in January 2003. Even more dramatic is the year-over year comparison, as incentives are up 41.3% from February 2002 to February 2003.
This data and the rest of Edmunds.com's new monthly True Cost of IncentivesSM report takes into account all manufacturers' various incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To assure 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.
Minivans offered the most significant increase in incentives per unit this month, jumping 18.2 percent to $2,739. The large light truck segment had the second highest increase, climbing 14 percent to $2,464 per unit in February.
European manufacturers expanded their incentives 27 percent from $1,120 in January to $1,422 in February. Despite incurring this expense, the total market share of the European manufacturers remained basically unchanged during the period.
Chrysler, Ford and General Motors incentives increased an average of 5% overall from $2,749 in January to $2,886 in February. Of those, Chrysler's increase was the largest at ten percent or $245 per vehicle; Chrysler enjoyed a market share increase of 2.1 percentage points during the period.
An analysis of the incentives spending by the origin of manufacturers demonstrated that for every dollar the Japanese manufacturers spent on every vehicle they sold in February 2003, Korean manufacturers spent $1.15, Europeans spent $1.67, and domestics spent $3.39.
"Looking individually at manufacturer's motivation to offer incentives, it seems some are pressured to subsidize older models and others that are not currently in high demand," stated Dr. Jane Liu, Executive Director of Data Analysis for Edmunds.com." Other manufacturers seem driven by desire to increase market share at almost any cost."
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 NYTimes.com's auto section and delivers monthly data reports to Morgan Stanley. 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 StudieSM 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.