FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Large Vehicles Get Heavy Incentives While Compacts Sell Closer to Sticker; Chrysler Incentives Down Dramatically
Santa Monica, CA - May 18, 2004 - Edmunds.com, the premier online resource for automotive information, reported today that the average manufacturer incentive per vehicle sold in the United States was $2,367 in April 2004, up $80, or 3.5%, from April 2003, and down $12, or 0.5%, from March 2004.
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 remained largely the same in April compared to March. There were, however, significant differences among the big three: Chrysler cut incentives spending dramatically in April by $659, a TCI record for domestic manufacturers, to $2,944 per vehicle and gained 0.2% market share. General Motors increased incentives spending by $226 to $3,620 per vehicle and increased market share by 0.7%. Ford's incentives spending increased by $107 to $2,914 per vehicle while its market share decreased by 0.4%.
"Chrysler's new value pricing strategy - lower sticker price, more content, lower incentives -- is working, so we may see the other domestics give it a chance in the near future," said Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com. "After all, it's been a staple for many of the imports for years."
In April 2004, Korean automakers spent $1,882 and European automakers spent $1,749 per vehicle sold, each of which were essentially unchanged from the prior month. Japanese automakers spent $793 per vehicle sold in April, down from $899 the prior month.
Of all brands, MINI spent the least nothing on incentives while Scion spent only $60 per vehicle and Lexus spent only $175. At the other end of the spectrum, Cadillac spent the most incentives dollars per vehicle for the second consecutive month, $4,792, followed by Lincoln at $4,658 and Oldsmobile at $4,291.
Among vehicle segments, large SUVs increased the most, $445, and offered the highest average incentives in April at $3,737 per vehicle. Other segments with high incentives were large cars at $3,685 and large trucks at $2,744. Luxury SUVs had the lowest average incentives at $1,198, followed by compact cars at $1,693 and compact SUVs at $1,798.
Luxury cars have lost the most market share since April 2003, decreasing from 3.8% to 2.9%, while minivans have gained the most market share during that period, up from 6.7% to 7.5% of the U.S. new vehicle market.
"Rising fuel prices seem to be affecting consumer behavior," states Dr. Liu. "New car buyers in large numbers are shifting away from the most gas-guzzling vehicles and showing greater interest in crossovers, minivans and wagons -- which, in many cases, offer lower profitability for the automakers."
Industry average days-to-turn, which measures how many days on average it took to sell vehicles after they arrived at dealerships, was down three days for the month at 66 days, which was unchanged from April 2003. Of all brands, Oldsmobile had the longest days-to-turn at 161, followed by Isuzu at 127 days. The quickest inventory turnaround was for MINI at 19 days, followed by Scion at 21 days.
In April 2004, the sales-weighted average new vehicle sticker price was $29,282, $101 less than in March 2004 and $524 higher than in April 2003. The sales-weighted average net price was $24,973 - 14.7% below average MSRP - down $51 for the month but up $546 compared to April 2003.
For domestic automakers, average net price was 18.7% below average MSRP, down 0.3% from the same period last year. Korean manufacturers' average net price was 15.6% below average MSRP in April 2004, up from 13.5% the previous year. Japanese manufacturers' average net price was 8.4% below average MSRP in April 2004, down from 9.0% last year. European manufacturers' average net price was 7.4% below average MSRP in March 2004, up slightly from 7.1% last year.
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 Data Services and is licensed to third parties. For example, the company supplies over 800,000 pages of content for the auto sections of AOL and NYTimes.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts. 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.