Edmunds.com Reports True Cost of Incentives for Automakers up Nearly 10 Percent One Year after Cash for Clunkers

Edmunds.com Reports True Cost of Incentives for Automakers up Nearly 10 Percent One Year after Cash for Clunkers


Edmunds.com Reports True Cost of Incentives for Automakers up Nearly 10 Percent One Year after Cash for Clunkers

True Cost of Incentives for the Top Seven Automakers
Automaker
August 2010
July 2010
August 2009
Chrysler Group (Chrysler, Dodge, Jeep)
$3,216
$3,132
$3,391
Ford (Ford, Lincoln, Mercury, Volvo)
$3,127
$3,111
$3,152
General Motors (Buick, Cadillac, Chevrolet,
GMC)
$3,738
$4,185
$3,237
Honda (Acura, Honda)
$1,708
$1,736
$898
Nissan (Infiniti, Nissan)
$2,959*
$2,957
$2,557
Toyota (Lexus, Scion, Toyota)
$2,180
$2,234
$1,622
Industry Average
$2,681
$2,765
$2,456
*Denotes a record

"It appears that some automakers are willing to sell fewer cars while spending less on incentives, thus make more profit per vehicle sold — a sound strategy really. They are learning to live on less — at least in terms of volume — as all Americans are," commented Edmunds.com Senior Analyst Michelle Krebs in her report on AutoObserver.com.

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,405 per vehicle sold in August 2010, down from $3,589 in July 2010. From July 2010 to August 2010, European automakers increased incentives spending by $187 to $2,643 per vehicle sold; Japanese automakers decreased incentives spending by $44 to $2,083 per vehicle sold; and Korean automakers decreased incentives spending by $88 to $1,819 per vehicle sold.

In August 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $2.76 billion, down 4.7 percent from July 2010. Chrysler, Ford and General Motors spent an aggregate of $1.5 billion, or 55.0 percent of the total; Japanese manufacturers spent $845 million, or 30.6 percent; European manufacturers spent $238 million, or 8.6 percent; and Korean manufacturers spent $158 million, or 5.7 percent.

Among vehicle segments, premium sport cars had the highest average incentives, $8,221 per vehicle sold, followed by large trucks at $4,359. Subcompact cars had the lowest average incentives per vehicle sold, $1,215, followed by sport cars at $1,422. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 12.9 percent, followed by large trucks at 11.8 percent of sticker price. Premium luxury cars averaged the lowest with 3.4 percent and sport cars followed with 3.9 percent of sticker price.

Comparing all brands, in August Scion spent the least, $497 followed by smart at $502 per vehicle sold. At the other end of the spectrum, Lincoln spent the most, $4,832, followed by Saab at $4,790 per vehicle sold. Relative to their vehicle prices, Mercury and Chrysler spent the most, 14.8 percent and 13.5 percent of sticker price, respectively; while Subaru spent only 2.0 percent and Porsche spent only 2.7 percent.

Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all automakers' 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.

About Edmunds.com, Inc. (http://www.edmunds.com/about/)
Edmunds.com Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. CarSpace is the most established automotive social networking Web site. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.

Leave a Comment

Edmunds Universe

Follow Us:


Edmunds iPad App

Company Profile and HistoryCompany Profile and History

@Edmunds@Edmunds

Corporate Communications

Nicole Carriere/Aaron Lewis/Allie Zamaria
www.edmunds.com

Media Hotline (media inquiries only)
310-309-4900

Email
pr (at) edmunds dot com