FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Industry Average Climbs to New Record as Domestic Automakers Exceed $4,000, Europeans Spend Over $2,500
SANTA MONICA, CALIF. - August 5, 2004 - Edmunds.com, the premier online resource for automotive information, reported today that the average manufacturer incentive per vehicle sold in the United States set a new record of $2,885 per vehicle sold in July 2004, up $217, or 8.1%, from July 2003, and up $138, or 5.0%, from June 2004.
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.
Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates passed the $4,000 mark for the first time, reaching $4,011 per unit in July, up $192 from June 2004. Chrysler lowered their incentives spending in July by $185 to $3,384 per vehicle and lost 2.3% market share. Ford had the biggest monthly increase in incentives spending, $358, for an average of $3,686 per vehicle, while its market share fell 1.3% to 16.8% - the lowest level ever recorded by Edmunds.com. GM increased incentives spending for the fourth month in a row, by $156 to $4,467 per vehicle, and gained 3.4% market share.
"Successful new model introductions like the Chrysler 300 — which made up 27% of the brand's sales in July — show the benefit of introducing exciting new products priced right for the marketplace," said Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "Both Ford and GM have new vehicles coming that should help them lower their incentives spending, at least at the beginning of the new model year."
In July 2004, Korean automakers spent $1,833 — down $35 — and European automakers spent a record $2,562 — up $228 — per vehicle sold. Japanese automakers spent $1,024 per vehicle sold in July, up from $921 the prior month.
"As evidenced by the record incentives spending by the European automakers in July, the incentives war is certainly not confined to the domestics," remarked Dr. Liu.
Of all brands, Mini spent the least on incentives, $80, while Scion spent only $212 per vehicle and Porsche spent only $257. At the other end of the spectrum, Cadillac spent the most incentives dollars per vehicle for the fifth consecutive month, $7,878, followed by Lincoln at $5,480 and Jaguar at $5,248.
Among vehicle segments, large SUVs continued to offer the highest average incentives in July, $4,885 per vehicle. Other segments with high incentives were luxury cars at $4,306 and large cars at $3,663. Compact cars had the lowest average incentives at $1,662, followed by sports cars at $1,987 and luxury sport cars at $2,050.
Midsize SUVs have lost the most market share since July 2003, decreasing from 13.5% to 12.9%, while large SUVs have gained the most market share during that period, up from 5.0% to 6.4% of the U.S. new vehicle market.
"Although incentives don't always drive market share proportionally, it seems the great deals on large SUVs are hard for consumers to ignore," noted Dr. Liu.
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 the auto sections of AOL and NYTimes.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts. 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 near Detroit.