FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: SUV Incentives Soar as Market Share Shifts to More Fuel-Efficient Vehicles
SANTA MONICA, CALIF. - June 10, 2004 - Edmunds.com, the premier online resource for automotive information, reported today that the average manufacturer incentive per vehicle sold in the United States was $2,507 in May 2004, down $25, or 1.0%, from May 2003, and up $140, or 5.9%, from April 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 went up $213 to $3,461 from April. Chrysler increased incentives spending in May by $304 to $3,248 per vehicle and gained 0.1% market share. GM increased incentives spending by $303 to $3,923 per vehicle and lost 0.7% market share. Ford increased incentives spending by $13 to $2,927 per vehicle and lost 0.5% market share.
In May, Korean automakers decreased incentives spending by $69 to $1,813 per vehicle and lost 0.1% market share. European automakers increased incentives spending by $293 to $2,042 per vehicle, the highest since August 2002, and lost 0.7% market share. Japanese automakers increased incentives spending by $106 to $899 per vehicle and gained 1.8% in market share.
Of all brands, MINI spent the least on incentives, $58 per vehicle, while Scion spent only $79 per vehicle and Lexus spent only $230. At the other end of the spectrum, Cadillac spent the most incentives dollars per vehicle for the third consecutive month at $5,738, followed by Lincoln at $5,102 and Oldsmobile at $5,039.
Among vehicle segments, large SUVs continued to offer the highest average incentives in May at $4,350 per vehicle. Other segments with high incentives were large cars at $3,664 and midsize SUVs at $2,973. Compact cars had the lowest average incentives at $1,696 per vehicle, followed by luxury SUVs at $1,925 and sports cars at $1,942.
"While the luxury SUV segment has the industry's second lowest incentives, in May automakers saw fit to direct the biggest increase in incentives to that segment, raising it a substantial $727 per vehicle, or nearly 50 percent more than April's average," said Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "Overall, May SUV incentives averaged $297 per vehicle higher than a year ago, while the average incentive was $25 lower."
Since May 2003, compact cars have gained the most market share during that period, up from 14.8% to 15.7%, while midsize SUVs have lost the most market share, decreasing from 13.2% to 12.1% of the U.S. new vehicle market.
"Clearly, rising fuel prices are in the minds of the automakers as they set up new incentives programs, and in the minds of buyers who are shifting market share to more fuel efficient vehicles," observed 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 outside Detroit.