FOR IMMEDIATE RELEASE
Edmunds.com Reports Automakers' True Cost of Incentives: Large Vehicles Receive Most Subsidization and Large Trucks Gain Most Market Share
Santa Monica, CA - August 27, 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 $2,668 in July 2003, up $519 or 24.2% from July 2002 and up 1.7% from June 2003. Industry average days-to-turn, which measures how many days on average it takes to sell a vehicle after it hits the dealer's lot, reached a record level in July at 73 days, up significantly from last July's average of 60 days.
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 hit a record high of $3,631 per unit in incentives in July, compared to $1,873 for European automakers, $1,447 for Korean automakers, and $1,075 for Japanese automakers.
Of the domestics, only Chrysler reduced incentives spending in July, down 9.2% from June to $3,172 per unit, while its market share decreased to its lowest level since August 2001, 11.8%, which was down by 1.7% from the prior month. Ford's incentives spending went up by 3.8% to $3,377 per unit in July while its market share decreased to 18.1%, one of its lowest levels in the last several years. In July, General Motors raised its incentives spending by 7% to $3,969 per unit, while increasing its market share by 1.2% to 29.7%.
"Almost the entire market share lost by the domestic manufacturers within the last year was captured by the Japanese automakers, while incentives on domestic vehicles have consistently been three times those offered on Japanese nameplates," stated Dr. Jane Liu, Executive Director of Data Analysis for Edmunds.com.
Among vehicle segment, large SUVs had the highest average incentives this month at $4,045, followed by large cars at $3,595 and large trucks at $3,459. Sports cars had the lowest average incentives at $1,263, followed by luxury SUVs at $1,525 and luxury sports cars at $1,797. Large trucks have gained the most market share since July 2002, up 3.2% to 14.5%, while midsize cars have lost the most market share during that period, down 3.3% to 15.7%.
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 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.