FOR IMMEDIATE RELEASE
Edmunds.com Reports Automakers' True Cost of Incentives: Leasing Loses Popularity as Cash and APR Incentives Abound; SUV and Pick-Up Truck Incentives and Sales Rise While Luxury Car Incentives and Sales Fall
Santa Monica, CA - May 29, 2003 - Edmunds.com (http://www.edmunds.com), the premier online resource for automotive information, reported today that the average manufacturer incentive per vehicle sold in the United States was $2,287 in April 2003, up $581 or 34.1% from April 2002 and up $52 or 2.3% from March 2003. On average, vehicles sold 65 days after arriving on dealer lots in April 2003 compared to 64 days in March 2003 and 52 days in April 2002.
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 assure 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.
Incentives spending for domestic Chrysler, Ford and General Motors nameplates averaged a record high of $3,089 per unit in incentives in April, compared to $1,558 for European automakers, $1,432 for Korean automakers, and $879 for Japanese automakers. Incentive spending continues to have a disproportionate effect on manufacturer market share. Chrysler spent $3000 per incentive in April, up 1.4% from $2960 in March, while its market share went down to 13.3% from 13.9%. In the same period, Ford increased incentives by 8.6% to $2,804 per unit and experienced a minor increase in market share, up to 19.6% from 19.3%. General Motors' incentives spending per unit dropped .4% to $3,334 this month while its market share rose 1.5 points to 27.6%. Incentives had a somewhat more predictable effect on market share of vehicle segments. Large SUVs had an industry high $3,678 incentives per unit sold in April, up 17.5% compared to the prior month. Simultaneously, U.S. market share of large SUVs increased to 4.9% in April from 3.9% in March. The large pick-up truck segment also saw a jump, up 15% for the month to $2,959 per unit, while that segment's market share went up about a percentage point to 14.2%. Conversely, the luxury car segment's per unit incentive decreased 13.4% to $2,540 in April while market share declined from 4.0% to 3.8%. "In April, manufacturers designated incentive dollars toward cash rebates and low APR programs rather than subsidized leases, which translated to a significant drop in the overall lease share from 16.6% to 13.2%," stated Dr. Jane Liu, Executive Director of Data Analysis for Edmunds.com. "Ford Mustang was an exception as its lease rate increased dramatically from 5% to 28% because of the effective '5$ a day' lease promotion." The highest rates of leasing in April were achieved by Land Rover (61.3%), Jaguar (59.7%), and BMW (46.1%).
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 NYTimes.com's auto section. Edmunds.com was named "best car research" site by Forbes ASAP, is viewed by consumers as the "most useful Web site" according to the J.D. Power and Associates New Autoshopper.com StudiesSM for both 2001 and 2002, 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, California and maintains a satellite office in Troy, Michigan.