FOR IMMEDIATE RELEASE
Edmunds.com Reports True Cost of Incentives: Record Incentives Climb to 20 Percent of Sticker Price
SANTA MONICA, Calif. — March 3, 2009 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,914 per vehicle sold in February 2009, up $216, or 8.0 percent, from January 2009, and up $400, or 15.9 percent, from February 2008.
"Automakers are spending at remarkable levels, but it is worth noting that in February, 27 percent of new car intenders switched to a used vehicle at the dealership." according to Edmunds.com CEO Jeremy Anwyl. "This is up from 16 percent in recent months and highlights an opportunity for automakers struggling to make monthly sales."
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,991 per vehicle sold in February 2009, up from $3,518 in January 2009. From January 2009 to February 2009, European automakers increased incentives spending by $67 to $3,150 per vehicle sold; Japanese automakers decreased incentives spending by $77 to $1,698 per vehicle sold; and Korean automakers increased incentives spending by $102 to $3,031 per vehicle sold.
"The last time sales were at this level was in the early 1980s, when the country had 25 percent fewer licensed drivers," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "Back then, you could practically buy a new car for the amount that some of today's automakers are spending on per-vehicle incentives."
|True Cost of Incentives for "Big Six" Automakers|
|Automaker||February 2009||January 2009||February 2008|
* Denotes a monthly record for the indicated automaker.
"Ironically, the word 'incentive' hardly applies to the money being spent by automakers right now," commented Edmunds' AutoObserver.com Senior Editor Michelle Krebs. "Consumers are simply not motivated to buy based on what they are seeing in the marketplace, and are instead waiting for a boost of economic confidence before making a major purchase."
In February 2009, the industry's aggregate incentive spending is estimated to have totaled approximately $1.9 billion, up 12.5 percent from January 2009. Chrysler, Ford and General Motors spent an aggregate of $1.2 billion, or 59.8 percent of the total; Japanese manufacturers spent $472 million, or 23.7 percent; European manufacturers spent $173 million, or 8.7 percent; and Korean manufacturers spent $154 million, or 7.8 percent.
Among vehicle segments, premium sport cars had the highest average incentives, $6,331 per vehicle sold, followed by luxury SUVs at $4,329. Subcompact cars had the lowest average incentives per vehicle sold, $762, followed by compact cars at $1,578. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.1 percent, followed by large cars at 13.0 percent of sticker price. Subcompact cars averaged the lowest with 4.7 percent and premium luxury cars followed with 5.1 percent of sticker price.
Comparing all brands, in February Scion spent $70 followed by MINI at $86 per vehicle sold. At the other end of the spectrum, Chrysler spent the most, $6,061, followed by Dodge at $5,674 per vehicle sold. Relative to their vehicle prices, Chrysler and Dodge spent the most, 20.7 percent and 19.0 percent of sticker price, respectively; while MINI spent virtually nothing and Scion spent 0.4 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.