FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Incentives Decline as Old Inventory Clears Out
SANTA MONICA, Calif. — November 3, 2009 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,468 per vehicle sold in October 2009, down $329, or 11.8 percent, from September 2009, and down $209, or 7.8 percent, from October 2008.
"Incentives declined simply because fewer old model year vehicles were sold in October, and the newer vehicles are not discounted nearly as heavily," explained Jessica Caldwell, Director of Industry Analysis for Edmunds.com. "Over 55 percent of vehicles sold in October were 2010 model year, compared with about 36 percent in September."
|Model Year||Percentage of October 2009 Sales||Percentage of September 2009 Sales||True Cost of IncentivesSM in October 2009||True Cost of IncentivesSM in September 2009|
* Denotes a record
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,655 per vehicle sold in October 2009, down from $3,880 in September 2009. From September 2009 to October 2009, European automakers decreased incentives spending by $635 to $2,686 per vehicle sold; Japanese automakers decreased incentives spending by $363 to $1,258 per vehicle sold; and Korean automakers decreased incentives spending by $301 to $1,751 per vehicle sold.
|True Cost of Incentives for the Top Seven Automakers|
|Automaker||October 2009||September 2009||October 2008|
|Chrysler Group (Chrysler, Dodge, Jeep)||$3,219||$4,224||$3,695|
|Ford (Ford, Lincoln, Mercury, Volvo)||$2,909||$3,087||$3,886|
|General Motors (Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, Saturn)||$4,277||$4,316||$3,668|
|Honda (Acura, Honda)||$508||$929||$1,049|
|Hyundai (Hyundai, Kia)||$1,751||$2,052||$2,528|
|Nissan (Infiniti, Nissan)||$2,505||$2,982||$1,795|
|Toyota (Lexus, Scion, Toyota)||$1,338||$1,515||$1,576|
In October 2009, the industry's aggregate incentive spending is estimated to have totaled approximately $2.04 billion, down 1.9 percent from September 2009. Chrysler, Ford and General Motors spent an aggregate of $1.3 billion, or 64.9 percent of the total; Japanese manufacturers spent $418 million, or 20.3 percent; European manufacturers spent $215 million, or 10.5 percent; and Korean manufacturers spent $87 million, or 4.3 percent.
"Many automakers deemed October 'truck month' and sure enough, the large truck segment reached a new incentive peak for the year, climbing to over $5,000 per truck," Edmunds.com Senior Analyst Michelle Krebs wrote on AutoObserver.com. ""Truck month' provided a good value for buyers who weren't deterred by rising gas prices."
Among vehicle segments, premium sport cars had the highest average incentives, $8,826 per vehicle sold, followed by premium luxury cars at $6,395. Subcompact cars had the lowest average incentives per vehicle sold, $928, followed by compact cars at $1,354. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 14.8 percent, followed by large cars at 12.6 percent of sticker price. Sport cars averaged the lowest with 5.3 percent and minivans followed with 5.4 percent of sticker price.
Comparing all brands, in October MINI spent $58 followed by Subaru at $262 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $7,398, followed by HUMMER at $6,051 per vehicle sold. Relative to their vehicle prices, Pontiac and Cadillac spent the most, 19.2 percent and 15.1 percent of sticker price, respectively; while MINI spent 0.3 and Subaru spent 1.0 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.