Edmunds.com Reports True Cost of Incentives for May; Incentives Rise Five Percent From Last Year
FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives for May; Incentives Rise Five Percent From Last Year
SANTA MONICA, Calif. — June 3, 2008 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,483 per vehicle sold in May 2008, up $132, or 5.6 percent, from April 2008, and up $117, or 5.0 percent, from May 2007.
"Manufacturers are trying to avoid increasing incentives," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "But we predict that incentives will continue to rise throughout the summer months to help boost vehicle sales."
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all automakers' various U.S. 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.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,489 per vehicle sold in May 2008, up from $3,263 in April 2008. From April 2008 to May 2008, European automakers increased incentives spending by $241 to $2,935 per vehicle sold; Japanese automakers increased incentives spending by $94 to $1,324 per vehicle sold; and Korean automakers decreased incentives spending by $224 to $1,932 per vehicle sold.
| True Cost of Incentives for "Big Six" Automakers | |||
|---|---|---|---|
| Automaker | May 2008 | April 2008 | May 2007 |
| Chrysler Group | $3,714 | $3,795 | $3,823 |
| Ford | $3,326 | $2,989 | $2,964 |
| General Motors | $3,477 | $3,132 | $2,996 |
| Honda | $1,256 | $1,405 | $1,383 |
| Nissan | $2,090 | $1,796 | $1,953 |
| Toyota | $1,045 | $840 | $804 |
In May 2008, the industry's aggregate incentive spending is estimated to have totaled approximately $3.56 billion, up 5.6 percent from April 2008. Chrysler, Ford and General Motors spent an aggregate of $2.35 billion, or 65.8 percent of the total; Japanese manufacturers spent $767 million, or 21.4 percent; European manufacturers spent $313 million, or 8.8 percent; and Korean manufacturers spent $144 million, or 4.0 percent.
"Domestic manufacturers are expected to spend the most amount of money on incentives this summer," commented Edmunds' AutoObserver.com Senior Editor Michelle Krebs. "The Japanese manufacturers are not expected to increase their spending on incentives because of the public's perception that they have more fuel-efficient vehicles."
Among vehicle segments, large trucks had the highest average incentives, $4,667 per vehicle sold, followed by large SUVs at $4,603. Sport cars had the lowest average incentives per vehicle sold, $1,198, followed by compact cars at $1,219. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 14.4 percent, followed by large cars at 13.5 percent of sticker price. Sport cars averaged the lowest, 4.1 percent, followed by luxury sport cars at 5.4 percent of sticker price.
Comparing all brands, in May Scion spent the least at $214 followed by MINI at $294 per vehicle sold. At the other end of the spectrum, Saab spent the most, $7,140, followed by Cadillac at $6,673 per vehicle sold. Relative to their vehicle prices, Saab and Cadillac spent the most, 20.3 percent. and 14.6 percent of sticker price, respectively, while Scion spent the least with 1.3 percent and MINI spent just 1.4 percent.
About Edmunds
Edmunds publishes three Web sites that empower, engage and educate automotive consumers and enthusiasts. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. 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 Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in January 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in February 2006 and is an automotive lifestyle social networking Web site for anyone with an interest in automobiles. The company is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.
