Gas Price Rise Not Translating to Increased Compact Car Sales, Says Edmunds.com


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Gas Price Rise Not Translating to Increased Compact Car Sales, Says Edmunds.com

SANTA MONICA, Calif. — April 28, 2005 — Despite rising gas prices, this month's compact car sales are expected to be down 5.2% compared to April 2004, according to Edmunds.com, the premier online resource for automotive information.

Only five vehicle segments are expected to post year-over-year increases this month, and none is remarkably fuel efficient. Those categories are sport cars (up 48.0%), luxury SUVs (up 7.7%), compact SUVs (up 5.1%), luxury cars (up 4.0%) and large trucks (up 3.6%).

In the same period, large SUV sales are expected to fall just 1.0%, representing 4.9% of the month's sales, compared to its 5.0% sales share in April 2004. Compact truck and midsize car segments are expected to post the biggest year-over-year declines, 5.2% and 4.8%, respectively.

"Without incentives we would be reporting a very different situation," observed Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "In recent months, incentives for large SUVs have been approximately three times the incentives for compact cars, tempting buyers to take advantage of bargains."

SUV incentives rose from an average of $2,475 per vehicle sold in March 2004 to $2,841 per vehicle sold in March 2005. Thanks in large part to these incentives, SUVs sold at a 13.8% discount from MSRP in March 2004 and a 15.5% discount from MSRP in March 2005. Compact car incentives dropped from $1,832 per vehicle sold in March 2004 to $1,486 per vehicle sold in March 2005. The segment's discount fell from 15.7% of MSRP in March 2004 to just 12.3% of MSRP in March 2005.

During the same period, the average incentive for all vehicles rose from $2,379 to $2,556; SUVs make up nearly a quarter of the overall marketplace while compact cars constitute 15%.

Edmunds.com estimates the total sales for April 2005 to be 1.49 million units, up 1.6% over last April when adjusted for the number of selling days.

However, other recent measures indicate that the industry is feeling pressure. Industry average days-to-turn, which measures how many days on average it takes to sell vehicles after they arrive at dealerships, was 72 days in March 2005, up from 64 days in February 2005 and up from 69 in March 2004. And the industrywide average net price was 15.6% below MSRP in March 2005, compared to 14.8% in March 2004.

This data was released with the Edmunds Price Index for new vehicles (EPI-N) (January 2002 = 100), which decreased from 101.8 in February to 100.8 in March. Similar in purpose to the Consumer Price Index (CPI), the EPI-N measures the average changes in retail prices for new vehicles with fixed options over time in order to analyze trends. Edmunds.com also calculates and reports a wide range of data including transaction prices and net prices of vehicles by country of origin, manufacturer, make, model and vehicle segment.

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.

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