FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Domestic Incentives Below $3000 Per Vehicle for First Time in Three Years
SANTA MONICA, Calif. — March 1, 2006 —Edmunds.com, the premier online resource for automotive information, reported today that the average automotive manufacturer incentive in the U.S. was $2,285 per vehicle sold in February 2006, down $140, or six percent, from January 2006, and down $84, or four percent, from February 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 is estimated to have totaled approximately $2.9 billion in February, up from nearly $2.7 billion in January. Chrysler, Ford and General Motors spent an aggregate of $2.07 billion, or 72 percent of the total; Japanese manufacturers spent $502 million, or 17 percent; European manufacturers spent $210 million, or seven percent; and Korean manufacturers spent $106 million, or four percent.
"Even though incentive levels are falling, the aggregate dollar amounts are still staggering," remarked Dr. Jane Liu, vice president of data analysis for Edmunds.com. "The month-over-month increase is seasonal; February's vehicle sales are typically ten to fifteen percent higher than January's even though the month is three days shorter."
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $2,934 per vehicle sold in February, down from $3,167 in January 2006. Chrysler's incentives spending was down $352 to $3,839 per vehicle sold; Ford's incentives spending was down $48 to $2,778 per vehicle sold; and General Motors decreased its incentives by $298 to $2,540 per vehicle sold.
From January to February, European automakers increased incentives spending by $128 to an average of $2,506 per vehicle sold; Japanese automakers decreased incentives spending by $58 to $1,196 per vehicle sold; and Korean automakers decreased incentives spending by $40 to an average of $1,963 per vehicle sold.
Comparing all brands, in February Scion spent the least, $91, followed by Honda at $330 per vehicle sold. At the other end of the spectrum, Jaguar spent the most, $6,580, followed by Lincoln at $5,063 per vehicle sold. Relative to their vehicle prices, Jeep and Dodge spent the most, 14.6 percent and 14.0 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.6 percent each.
Among vehicle segments, large SUVs continued to have the highest average incentives, $4,917 per vehicle sold, followed by large trucks at $3,517 per vehicle sold. Sport cars had the lowest average incentives per vehicle, $505, followed by compact cars at $969 per vehicle. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large SUVs averaged the highest, 11.2 percent, followed by minivans at 10.7 percent of sticker price. Sports cars averaged the lowest, 1.6 percent, followed by luxury SUVs at 3.7 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.
Edmunds.com is the premier online resource for automotive information. Its comprehensive set of data, tools and services is generated by Edmunds.com Information Solutions and is licensed to third parties and used by over 15,000 cars dealers including 98 of the 100 dealers named to the Ward's Dealer Business "e-Dealer 100" list. Perhaps the most popular consumer product, Edmunds.com True Market Value® pricing, is relied upon by millions of people seeking market-reflective valuations for new and used vehicles. The company also supplies content for the auto sections of NYTimes.com, AOL, CNN.com and About.com; provides weekly data to Automotive News; and delivers monthly data reports to Wall Street analysts. In addition, Edmunds.com publishes Inside Line (), a free high-speed online magazine for auto enthusiasts, and CarSpace (www.carspace.com), an automotive lifestyle social networking Web site for anyone with an interest in automobiles. 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, was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated number one in Keynote's study of third-party automotive web sites. The company is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.