FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: European and Japanese Automakers Spend at Record Levels
SANTA MONICA, Calif. — April 3, 2006 — Edmunds.com, the premier online resource for automotive information, reported today that the average automotive manufacturer incentive in the U.S. was $2,510 per vehicle sold in March 2006, up $162, or seven percent, from February 2006, and down $46, or nearly two percent, from March 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 $3.8 billion in March, up from nearly $3.0 billion in February. Chrysler, Ford and General Motors spent an aggregate of $2.73 billion, or 71 percent of the total; Japanese manufacturers spent $688 million, or 18 percent; European manufacturers spent $283 million, or seven percent; and Korean manufacturers spent $129 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,205 per vehicle sold in March, up from $3,001 in February 2006. Chrysler's incentives spending was up $234 to $4,005 per vehicle sold; Ford's incentives spending was up $432 to $3,261 per vehicle sold; and General Motors increased its incentives by $53 to $2,691 per vehicle sold.
"Average European and Japanese incentives have never been higher," remarked Dr. Jane Liu, vice president of data analysis for Edmunds.com. "BMW, Nissan and Toyota are all at record levels — $3,483, $2,314 and $1,321 per vehicle sold, respectively — and a number of other brands are also helping to pull up these averages."
From February to March, European automakers increased incentives spending by $185 to an average of $2,919 per vehicle sold; Japanese automakers increased incentives spending by $142 to $1,347 per vehicle sold; and Korean automakers increased incentives spending by $24 to an average of $1,972 per vehicle sold.
Comparing all brands, in March Scion spent the least, $73, followed by Honda at $515 per vehicle sold. At the other end of the spectrum, Jaguar spent the most, $8,187, followed by Lincoln at $6,546 per vehicle sold. Relative to their vehicle prices, Jeep and Mercury spent the most, 15.3 percent and 15.2 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.4 percent and 0.9 percent, respectively.
Among vehicle segments, large SUVs continued to have the highest average incentives, $5,001 per vehicle sold, followed by large trucks at $3,766. Sport cars had the lowest average incentives per vehicle sold, $1,012, followed by compact cars at $1,048. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large SUVs averaged the highest, 11.7 percent, followed by compact SUVs at 11.4 percent of sticker price. Sports cars averaged the lowest, 3.2 percent, followed by luxury SUVs at 5.5 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.