FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Industry Sets New Record
SANTA MONICA, Calif. — April 1, 2009 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $3,169 per vehicle sold in March 2009, up $171, or 5.7 percent, from February 2009, and up $733, or 30.1 percent, from March 2008.
This is the highest industry average on record. The previous record was set September 2004 when zero percent financing was extremely popular and drove the average incentive spend to $3,146 per vehicle sold.
"Automakers are pulling every lever in their effort to attract buyers, as evidenced by the new programs from Ford and GM," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "The typical incentive programs simply do not resonate in today's economy."
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $4,505 per vehicle sold in March 2009, up from $4,134 in February 2009. From February 2009 to March 2009, European automakers increased incentives spending by $326 to $3,398 per vehicle sold; Japanese automakers decreased incentives spending by $58 to $1,628 per vehicle sold; and Korean automakers increased incentives spending by $360 to $3,572 per vehicle sold.
|True Cost of Incentives for the Top Seven Automakers|
|Automaker||March 2009||February 2009||March 2008|
|Chrysler (Chrysler, Dodge, Jeep)||$4,927||$5,608*||$4,068|
|Ford (Ford, Lincoln, Mercury, Volvo)||$3,675||$3,384||$2,972|
|General Motors (Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, Saturn)||$4,836*||$3,681||$3,248|
|Honda (Acura, Honda)||$1,306||$1,249||$1,231|
|Hyundai (Hyundai, Kia)||$3,572*||$3,212||$2,123|
|Nissan (Infiniti, Nissan)||$2,298||$2,572||$1,931|
|Toyota (Lexus, Scion, Toyota)||$1,601||$1,682||$849|
* Denotes a record for the indicated automaker
In March 2009, the industry's aggregate incentive spend is estimated to have totaled approximately $2.4 billion, up 19.0 percent from February 2009. Chrysler, Ford and General Motors spent an aggregate of $1.5 billion, or 61.9 percent of the total; Japanese manufacturers spent $511 million, or 20.8 percent; European manufacturers spent $227 million, or 9.3 percent; and Korean manufacturers spent $196 million, or 7.9 percent.
"Hyundai is particularly interesting to watch right now," commented Edmunds' AutoObserver.com Senior Editor Michelle Krebs. "The company has a lot of momentum and is spending a remarkable amount of money to capitalize on it."
Among vehicle segments, premium sport cars had the highest average incentives, $6,972 per vehicle sold, followed by large SUVs at $5,323. Subcompact cars had the lowest average incentives per vehicle sold, $949, followed by compact cars at $1,830. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large car averaged the highest, 14.9 percent of sticker price, followed by large trucks at 14.6 percent. Premium luxury cars averaged the lowest with 3.63 percent of sticker price, and subcompact cars followed with 5.8 percent.
Comparing all brands, in March Scion spent the least, $87, followed by MINI at $553 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $6,839, followed by Lincoln at $5,942 per vehicle sold. Relative to their vehicle prices, Kia and Chrysler spent the most, 22.6 percent and 17.6 percent of sticker price, respectively; while Scion spent 0.5 and MINI spent 2.5 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.