FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives for Automakers
SANTA MONICA, Calif. — June 2, 2005 — Edmunds.com, the premier online resource for automotive information, reported today that the average automaker incentive in the United States was $2,566 per vehicle sold in May 2005, up $59, or 2.4%, from May 2004, and up $132, or 5.4%, from April 2005.
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.
The industry's aggregated incentives spending totaled $3.8 billion in May. Domestic automakers spent $3 billion, or 79% of the total; their market share for vehicle sales was 57.4% for the month. Japanese automakers spent $530 million, or 13%; their market share was 32.0%, European automakers spent $171 million, or 4%; their market share was 6.1%. Korean automakers spent $119 million, or 3%; their market share was 4.4%.
Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates averaged $3,524 per vehicle sold in May, up $185 from April 2005, the highest May on record. Chrysler increased incentives spending $349 to $3,884 per vehicle sold in May — a record high for Chrysler. In the same period, the company's market share increased by 0.6%, up to 14.4%. Ford decreased incentives spending by $47 to $2,939 per vehicle sold in May while its market share increased by 0.3% to 17.6%. General Motors increased incentives spending by $252 to $3,729 per vehicle sold while its market share increased by 0.4% to 25.4%.
From April to May, European automakers decreased incentives spending by $42 to an average of $1,877 per vehicle sold and lost 0.1% market share. Japanese automakers decreased incentives spending by $43 to an average of $1,108 per vehicle sold and lost 1.0% market share. Korean automakers decreased incentives spending by $76 to an average of $1,809 per vehicle sold and lost 0.1% market share.
Comparing all brands in May, Mini spent the least, $30 per vehicle sold, while Scion spent only $91 and Porsche spent just $269 per vehicle sold. At the other end of the spectrum, Cadillac was the biggest spender at $6,767 per vehicle sold, followed by Lincoln at $5,890 and Buick at $4,376 per vehicle sold. Looking at incentives expenditures as a percentage of MSRP for each brand, Mercury spent the most, 14.9%, while Mini and Porsche spent the least, 0.1%.and 0.4%, respectively.
Among vehicle segments, large SUVs continued to offer the highest average incentives, $4,665 per vehicle sold, while sports cars had the lowest average incentives, $799 per vehicle sold. Looking at incentives expenditures as a percentage of MSRP for each segment, large SUVs had the highest, 10.9%, while sports cars had the lowest, 2.7%.
Midsize cars have lost the most market share since May 2004, decreasing from 16.3% to 15.2%, while luxury sports cars have gained the most market share during that period, up from 4.2% to 5.1% of the new vehicle market.
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.com Information Solutions and is licensed to third parties. For example, the company supplies content for the auto sections of NYTimes.com, AOL, About.com, iVillage.com and IGN.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts. Edmunds.com also publishes a high-speed, on-screen car magazine called Inside Line available free at www.insideline.com. 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 outside Detroit.