FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives for February; Concludes It's a Car Buyer's Market
SANTA MONICA, Calif. — March 3, 2008 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,435 per vehicle sold in February 2008, up $22, or 0.9 percent, from January 2008, and up $188, or 8.4 percent, from February 2007.
"In recent months, incentives have been boosted to the levels we saw regularly before automakers instituted the 'value pricing' strategy that aimed to reduce sticker prices and minimize the need for incentives," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "To combat this soft market, automakers are once again putting remarkably generous dollar amounts on the hoods and ironically reestablishing consumer expectations that they will be offered dramatic deals. It's a car buyer's market, and that will likely be true for months to come."
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.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,393 per vehicle sold in February 2008, up from $3,334 in January 2008. From January 2008 to February 2008, European automakers decreased incentives spending by $555 to $1,945 per vehicle sold; Japanese automakers increased incentives spending by $22 to $1,313 per vehicle sold; and Korean automakers increased incentives spending by $603 to $1,807 per vehicle sold.
|True Cost of Incentives for the "Big Six" Automakers|
|Automaker||February 2008||January 2008||February 2007|
In February 2008, the industry's aggregate incentive spending is estimated to have totaled approximately $2.95 billion, up 17.0 percent from January 2008. Chrysler, Ford and General Motors spent an aggregate of $2.1 billion, or 70.8 percent of the total; Japanese manufacturers spent $604 million, or 20.5 percent; European manufacturers spent $162 million, or 5.5 percent; and Korean manufacturers spent $95 million, or 3.2 percent.
"February is an interesting month, since it follows the slowest month of the year and includes traditional shopping holidays that some automakers really latch onto," commented Edmunds' AutoObserver.com Senior Editor Michelle Krebs. "For example, this month Honda spent more than Toyota — a rare event. Meanwhile, BMW cut its incentive spend by two-thirds compared with January, single-handedly pulling down the European average below last year's despite other automakers' slight increases in spending."
Among vehicle segments, large trucks had the highest average incentives, $4,466 per vehicle sold, followed by large SUVs at $3,702. Compact cars had the lowest average incentives per vehicle sold, $1,065, followed by sport cars at $1,356. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.9 percent, followed by large cars at 12.5 percent of sticker price. Luxury sports cars averaged the lowest, 2.9 percent, followed by sport cars at 4.7 percent of sticker price.
Comparing all brands, in February Mini spent the least — virtually nothing — followed by Scion at $182 per vehicle sold. At the other end of the spectrum, Saab spent the most, $6,266, followed by Cadillac at $5,878 per vehicle sold. Relative to their vehicle prices, Saab and Pontiac spent the most, 17.6 percent and 16.8 percent of sticker price, respectively, while Mini spent virtually nothing and Porsche spent just 1.1 percent.
About Edmunds Inc. (http://www.edmunds.com/about/)
Edmunds Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. 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®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. 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 Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.