FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Japanese Incentives Reach Record High
SANTA MONICA, Calif. — (April 4, 2005) — Edmunds.com, the premier online resource for automotive information, reported today that the average manufacturer automotive incentive in the United States was $2,556 per vehicle sold in March 2005, up $177, or 7.0%, from March 2004, and up $187, or 7.9%, from February 2005.
Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all of the manufacturers' various United States 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.
Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates averaged $3,472 per vehicle sold in March, up $311 from February 2005. Chrysler increased incentives spending by $200 to $3,507 per vehicle sold in March, while its market share decreased by 1.3%, down to 13.6%. After five consecutive months of lowering incentives, in March Ford reversed course and increased incentives spending by $389 to $3,064 per vehicle, while its market share decreased by 0.8% to 17.9%. General Motors also spent more money on incentives in March, up by $312 to $3,732 per vehicle sold, while its market share recovered from the record low of February —up by 2.4% to 26.4%. In total, domestic manufacturers gained market share in March, increasing from 57.6% to 57.9%.
In March, Korean automakers increased incentives spending by $120 to an average of $1,737 per vehicle sold and lost 0.2% market share, achieving a total of 4.2%. European automakers decreased incentives spending by $23 to average $1,967 per vehicle sold and lost 0.3% market share, achieving a total of 5.7%. This was the lowest market share for the European manufacturers since October 2001. Japanese automakers increased incentives spending by $62 to average $1,110 per vehicle — a record high — and gained 0.2% market share for a total of 32.1%.
Comparing all brands in March, Mini spent virtually nothing on incentives, while Scion spent only $109 and Porsche spent $177 per vehicle sold. At the other end of the spectrum, Lincoln was the biggest spender at $5,901 in March, followed by Cadillac at $4,831 and Jaguar at $4,529 per vehicle sold. Looking at incentives expenditures as a percentage of MSRP for each brand, Pontiac spent the most, 16.5%, while Mini and Porsche spent the least, 0%.and 0.3%, respectively. Among vehicle segments, in March, large SUVs offered the highest average incentives, $4,290 per vehicle sold, while sports cars had the lowest average incentives per vehicle at $874. Looking at incentives expenditures as a percentage of MSRP for each segment, large cars were the highest, 11.7%, while sports cars were the lowest, 3.0%.
Luxury cars have lost the most market share since March 2004, decreasing from 3.1% to 2%, while large trucks have gained the most market share during that period, up from 14.4% to 15.2% of the new vehicle market.
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.com, Inc.
Edmunds.com is the premier online resource for automotive information. Its comprehensive set of data, tools and services, including Edmunds.com True Market Value® pricing, is generated by Edmunds.com Information Solutions and is licensed to third parties. For example, the company supplies content for the auto sections of NYTimes.com, AOL, About.com, iVillage.com and IGN.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts. Edmunds.com also publishes a high-speed, on-screen car magazine called Inside Line available free at www.insideline.com. 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 StudySM and was ranked first in the Survey of Car-Shopping Web Sites as reported by The Wall Street Journal. The company is headquartered in Santa Monica, Calif. and maintains a satellite office outside Detroit.