FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives for November; Domestic Automakers Hunker Down While Imports Pursue Market Share
SANTA MONICA, Calif. — December 2, 2008 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,625 per vehicle sold in November 2008, down $52, or 1.9 percent, from October 2008, but up $346, or 15.2 percent, from November 2007.
"All three domestic automakers lowered their incentive spending this month, seeking to preserve cash during these incredibly tough times," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "Meanwhile, the imports have poured more money into incentives, attempting to seize the opportunity to gain market share. Toyota's monthly incentives spend hit a new record high in November, and the company's market share might follow suit."
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,451 per vehicle sold in November 2008, down from $3,772 in October 2008. From October 2008 to November 2008, European automakers decreased incentives spending by $168 to $2,598 per vehicle sold; Japanese automakers increased incentives spending by $252 to $1,686 per vehicle sold; and Korean automakers decreased incentives spending by $28 to $2,500 per vehicle sold.
|True Cost of Incentives for "Big Six" Automakers|
|Automaker||November 2008||October 2008||November 2007|
In November 2008, the industry's aggregate incentive spending is estimated to have totaled approximately $2.2 billion, down 0.2 percent from October 2008. Chrysler, Ford and General Motors spent an aggregate of $1.36 billion, or 60.9 percent of the total; Japanese manufacturers spent $565 million, or 25.3 percent; European manufacturers spent $211 million, or 9.4 percent; and Korean manufacturers spent $97 million, or 4.3 percent.
"Gas prices continue to play a role in car-shopping behavior," commented Edmunds' AutoObserver.com Senior Editor Michelle Krebs. "Now that gas prices are remarkably low, there is no need for automakers to spend quite as much on incentives for large trucks and SUVs. Even the Japanese automakers, which are boosting incentives on most vehicles, recognize that they can reduce incentives on their large SUVs and trucks without impairing consumer interest."
Among vehicle segments, premium luxury cars had the highest average incentives, $5,926 per vehicle sold, followed by large trucks at $5,187. Subcompact cars had the lowest average incentives per vehicle sold, $439, followed by compact cars at $1,064. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 15.8 percent, followed by minivans at 10.7 percent of sticker price. Subcompact cars averaged the lowest with 2.7 percent and sport cars followed with 4.1 percent of sticker price.
Comparing all brands, in November MINI spent the least at $79 followed by Scion at $195 per vehicle sold. At the other end of the spectrum, Infiniti spent the most, $5,015, followed by SAAB at $4,860 per vehicle sold. Relative to their vehicle prices, Mercury and Kia spent the most, 15.4 percent and 13.9 percent of sticker price, respectively; while MINI spent just 0.4 and Scion spent 1.2 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 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.