FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Record Incentives on Large Trucks Pay Off for Automakers
SANTA MONICA, CALIF. - September 7, 2004 - Edmunds.com (http://www.edmunds.com), the premier online resource for automotive information, reported today that the average manufacturer incentives per vehicle sold in the United States was $2,721 in August 2004, up $91, or 3.4%, from August 2003, and down $164, or 5.7%, from July 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 was $3,851 per vehicle sold in August, up $164 from August 2003 and down $160 from July 2004. Chrysler's incentives spending rose $10 to $3,394 per vehicle while the brand gained 0.3% market share. Ford increased its incentives per vehicle by $287, to a record $3,973, and gained 0.5% market share. GM dramatically lowered its incentives by $486 to $3,981 per vehicle and lost 1.0% market share.
"Chrysler and GM have many 2005 model year vehicles on the market, which kept their incentives spends in check this month," said Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "On the other hand, Ford is moving into the 2005 model year at a slower pace while trying to clear out their current inventory. As a result, Ford's incentive levels hit a record high, coming within ten dollars of GM's average for the first time since March 2002, when GM averaged $2,271 and Ford averaged $2,262 per vehicle sold."
In August 2004, European automakers spent $2,174 per vehicle sold, $421 higher than August 2003 and $389 less than July 2004. Japanese automakers spent $862, $170 less than August 2003 and $162 less than July 2004. Korean automakers spent $1,882, $398 more than August 2003 and $49 more than July 2004. Market share for all imports experienced very little variation compared with August 2003. European and Korean manufacturers gained .01% and .15% respectively, while Japanese market share dropped from 31.44% to 31.16%.
Of all brands, Mini spent the least on incentives in August, $23 per vehicle sold, while Scion spent only $56 and Acura spent just $217. At the other end of the spectrum, Lincoln spent the most on incentives, $5,912 per vehicle sold, followed by Cadillac at $5,797 and Mercury at $5,541. From August 2003 to August 2004, Chrysler gained the most market share, growing from 2.22% to 3.37% , while Scion had the second largest boost, from 0.11% to 0.88%. During the same period, Mitsubishi lost the most market share, dropping from 1.68% to 0.75% and Toyota fell from 10.58% to 10.01%.
Among vehicle segments, large SUVs offered the highest average incentives in August for the fifth straight month, $4,821 per vehicle. Other segments with high incentives were large trucks at $3,727 and luxury cars at $3,264. Luxury sport cars had the lowest average incentives at $1,547, followed by compact cars at $1,626 and sport cars at $1,887. Midsize cars have lost the most market share since August 2003, decreasing from 17.2% to 15.9% of the U.S. new vehicle market, while large trucks have gained the most market share during that period, up from 14.0% to 15.6%.
"Despite uncertainty about the future of gas prices, large trucks sold at a brisk pace last month," observed Dr. Liu. "Record levels of incentives had a great deal to do with the segment's market share gains. It is interesting to note that 2004 model year vehicles made up a notably high percentage --- 95.2% -- of large truck sales while other segments are deeper into the 2005 model year, selling an average of less than 70% 2004 model year vehicles."
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 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 outside Detroit.