Edmunds.com Reports True Cost of Incentives: Model-Year Clearance Events Increase July Incentives
SANTA MONICA, Calif. — August 3, 2010 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,753 per vehicle sold in July 2010, up $63, or 2.3 percent, from June 2010, and up $67, or 2.5 percent, from July 2009.
"This year, seasonal incentives started earlier than in years' past, which really helped boost sales in July," stated Jessica Caldwell, Director of Industry Analysis for Edmunds.com. "Typically, August is when manufacturers really start to push the previous year models off dealership lots."
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,545 per vehicle sold in July 2010, up from $3,515 in June 2010. From June 2010 to July 2010, European automakers increased incentives spending by $52 to $2,440 per vehicle sold; Japanese automakers increased incentives spending by $177 to $2,097 per vehicle sold; and Korean automakers increased incentives spending by $81 to $1,907 per vehicle sold.
|True Cost of Incentives for the Top Seven Automakers|
|Automaker||July 2010||June 2010||July 2009|
|Chrysler Group (Chrysler, Dodge, Jeep)||$3,105||$3,259||$4,201|
|Ford (Ford, Lincoln, Mercury, Volvo)||$3,118||$3,182||$3,288|
|General Motors (Buick, Cadillac, Chevrolet,
|Honda (Acura, Honda)||$1,773||$1,489||$1,281|
|Nissan (Infiniti, Nissan)||$2,839*||$2,594||$2,605|
|Toyota (Lexus, Scion, Toyota)||$2,204||$2,141||$1,302|
In July 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $2.93 billion, up 11.0 percent from June 2010. Chrysler, Ford and General Motors spent an aggregate of $1.7 billion, or 57.3 percent of the total; Japanese manufacturers spent $882 million, or 30.0 percent; European manufacturers spent $223 million, or 7.6 percent; and Korean manufacturers spent $150 million, or 5.1 percent.
"Nissan stands out in July, spending the highest amount ever on incentives and seeing its highest lease percentage ever. A third of Nissan's transactions were leases," said Edmunds.com Senior Analyst Michelle Krebs in her report on AutoObserver.com.
Krebs continued, "General Motors used more dealer cash than usual to sweep out older models from their inventory."
Among vehicle segments, premium sport cars had the highest average incentives, $5,648 per vehicle sold, followed by large trucks at $4,574. Sport cars had the lowest average incentives per vehicle sold, $1,411, followed by subcompact cars at $1,525. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 13.5 percent, followed by large trucks at 12.4 percent of sticker price. Premium luxury cars averaged the lowest with 3.5 percent and sport cars followed with 3.9 percent of sticker price.
Comparing all brands, in July Subaru spent the least, $563 followed by Scion at $654 per vehicle sold. At the other end of the spectrum, Saab spent the most, $6,822, followed by Cadillac at $5,790 per vehicle sold. Relative to their vehicle prices, Saab and Mercury spent the most, 17.5 percent and 15.7 percent of sticker price, respectively; while Subaru spent 2.2 and Porsche spent 2.7 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.com, Inc. (http://www.edmunds.com/about/)
Edmunds.com Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. CarSpace is the most established automotive social networking Web site. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.