FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives for March: Cash and Financing Incentives Virtually Flat as Automakers Aim to Spur Sales with Equipment Giveaways
SANTA MONICA, Calif. — April 3, 2007 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,512 per vehicle sold in March 2007, up $220, or 9.6 percent, from February 2007, and down $9, or 0.4 percent, from March 2006.
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.
"Compared to last year, incentives overall are virtually flat, but the specifics are quite different," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "Last March, generally speaking proportional incentives were offered for each market segment. This year, automakers have placed generous incentives on large cars and trucks, while small vehicles are in high demand and don't need incentives to sell."
In March, the industry's aggregate incentive spending is estimated to have totaled approximately $3.8 billion, up from $2.8 billion in February. Chrysler, Ford and General Motors spent an aggregate of $2.6 billion, or 69 percent of the total; Japanese manufacturers spent $676 million, or 18 percent; European manufacturers spent $319 million, or 9 percent; and Korean manufacturers spent $143 million, or 4 percent.
Edmunds' AutoObserver.com has discovered that some automakers are giving away satellite radio and DVD systems to spur sales for certain slow-moving models. Senior Editor Michelle Krebs noted in today's featured article, "Financing deals and cash rebates may be losing their allure. The feature spiffs give the automakers something novel and appealing to advertise."
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,330 per vehicle sold in March, up from $3,019 in February 2007. From February to March, European automakers increased incentives spending by $964 to $3,209 per vehicle sold; Japanese automakers increased incentives spending by $26 to $1,261 per vehicle sold; and Korean automakers increased incentives spending by $164 to $2,163 per vehicle sold.
|True Cost of Incentives for the "Big Six" Automakers|
|Automaker||March 2007||February 2007||March 2006|
Among vehicle segments, large cars had the highest average incentives, $4,223 per vehicle sold, followed by large SUV's at $3,789. Sport cars had the lowest average incentives per vehicle sold, $904, followed by compact cars at $1,170. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 15.3 percent, followed by minivans at 12.9 percent of sticker price. Sport cars averaged the lowest, 3.1 percent, followed by luxury sports cars at 3.6 percent of sticker price.
Comparing all brands, in March Scion spent the least, $76, followed by Porsche at $531 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $7,112, followed by Jaguar at $5,604 per vehicle sold. Relative to their vehicle prices, Mercury and Jeep spent the most, 17.0 percent and 16.7 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.5 percent and 0.7 percent, respectively.
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 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.