FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Consumers Finding Heavily Discounted 2006 Models on Many Dealer Lots
SANTA MONICA, Calif. — October 3, 2006 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,587 per vehicle sold in September 2006, up $182, or eight percent, from August 2006, and up $243, or ten percent, from September 2005.
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all manufacturers' various U.S. 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.
The industry's aggregate incentives spending are estimated to have totaled approximately $3.6 billion in September, unchanged from August. Chrysler, Ford and General Motors (GM) spent an aggregate of $2.6 billion, or 73 percent of the total; Japanese manufacturers spent $613 million, or 17 percent; European manufacturers spent $237 million, or seven percent; and Korean manufacturers spent $111 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,570 per vehicle sold in September, up from $3,120 in August 2006. Compared with last month, Chrysler's incentives spending was up $1,171 to $4,080 per vehicle sold; Ford's incentives spending was up $771 to $4,068 per vehicle sold; and General Motors decreased its incentives by $50 to $3,061 per vehicle sold.
"High levels of incentive spending can largely be attributed to heavy discounts on 2006 model year vehicles," remarked Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "Even though the traditional model year change-over has occurred, previous model year vehicles make up over 80 percent of some automakers' sales."
From August to September, European automakers decreased incentives spending by $347 to $2,644 per vehicle sold; Japanese automakers decreased incentives spending by $107 to $1,253 per vehicle sold; and Korean automakers decreased incentives spending by $78 to $1,702 per vehicle sold.
Comparing all brands, in September Scion spent the least, $84, followed by Porsche at $442 per vehicle sold. At the other end of the spectrum, Jaguar spent the most, $7,892, followed by Saab at $6,902 per vehicle sold. Relative to their vehicle prices, Saab and Jeep spent the most, 21.6 percent and 18.6 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.5 percent and 0.6 percent, respectively.
Among vehicle segments, large SUVs had the highest average incentives, $5,352 per vehicle sold, followed by large trucks at $4,990. Compact cars had the lowest average incentives per vehicle sold, $672, followed by luxury sports cars at $1,207. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 16.1 percent, followed by large SUVs at 14.1 percent of sticker price. Luxury sport cars averaged the lowest, 2.2 percent, followed by compact cars at 4.0 percent of sticker price.
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. (www.edmunds.com)
Edmunds.com, Inc. publishes three Web sites that empower, engage and educate automotive consumers and enthusiasts. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value