FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: European and Japanese Manufacturers Had Record-High Incentive Spending in July
SANTA MONICA, Calif. — August 1, 2006 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,929 per vehicle sold in July 2006, up $316, or 12 percent, from June 2006, but down $52, or nearly two percent, from July 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 $4.5 billion in July, up from $3.9 billion in June. Chrysler, Ford and General Motors (GM) spent an aggregate of $3.4 billion, or 75 percent of the total; Japanese manufacturers spent $694 million, or 15 percent; European manufacturers spent $311 million, or seven percent; and Korean manufacturers spent $126 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,961 per vehicle sold in July, up from $3,456 in June 2006. Compared with last month, Chrysler's incentives spending was down $1,387 to $2,658 per vehicle sold; Ford's incentives spending was up $330 to $3,919 per vehicle sold; and General Motors increased its incentives by $1,461 to $4,578 per vehicle sold.
From June to July, European automakers increased incentives spending by $319 to $3,110 per vehicle sold — a record high; Japanese automakers increased incentives spending by $101 to $1,361 per vehicle sold — also a record high; and Korean automakers decreased incentives spending by $128 to $1,683 per vehicle sold.
"Chrysler and GM swapped positions from June to July as GM offered zero percent financing in July -- increasing its spending per vehicle by nearly $1,500 -- while Chrysler went away from zero percent financing in June to its Employee Plus Program in July, saving that company nearly $1,400 per vehicle," remarked Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "There was record-level incentive spending by European and Japanese automakers this month, as Europeans manufacturers increased leasing incentives and the Japanese spent more on their larger trucks and SUVs to help counter the effect on sales of the high cost of fuel."
Comparing all brands, in July Scion spent the least, $66, followed by Porsche at $414 per vehicle sold. At the other end of the spectrum, Jaguar spent the most, $7,205, followed by Cadillac at $6,074 per vehicle sold. Relative to their vehicle prices, Saab and Chevrolet spent the most, 19.0 percent and 18.9 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.4 percent and 0.6 percent, respectively.
Among vehicle segments, large trucks had the highest average incentives, $5,245 per vehicle sold, followed by large SUVs at $5,206. Sport cars had the lowest average incentives per vehicle sold, $746, followed by compact cars at $1,072. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 17.1 percent, followed by large SUVs at 13.8 percent of sticker price. Sports cars averaged the lowest, 2.7 percent, followed by compact cars at 6.4 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 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, 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 No. 1 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.