Edmunds.com Reports True Cost of Incentives: Toyota Recall Incentives Make Only Small Dent in January

Edmunds.com Reports True Cost of Incentives: Toyota Recall Incentives Make Only Small Dent in January


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Edmunds.com Reports True Cost of Incentives: Toyota Recall Incentives Make Only Small Dent in January

SANTA MONICA, Calif. — February 2, 2010 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,382 per vehicle sold in January 2010, down $160, or 6.3 percent, from December 2009, and down $326, or 12.0 percent, from January 2009.

"January incentives were not particularly generous or compelling — until some automakers began trying to conquest unsettled Toyota owners and shoppers late in the month," stated Jessica Caldwell, Director of Industry Analysis for Edmunds.com. "January sales numbers are up from last year only because of fleet sales."

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,108 per vehicle sold in January 2010, down from $3,399 in December 2009. From December 2009 to January 2010, European automakers decreased incentives spending by $363 to $2,611 per vehicle sold; Japanese automakers decreased incentives spending by $1 to $1,563 per vehicle sold; and Korean automakers increased incentives spending by $69 to $2,096 per vehicle sold.

True Cost of Incentives for the Top Seven Automakers
Automaker January 2010 December 2009 January 2009
Chrysler Group (Chrysler, Dodge, Jeep) $3,061 $2,567 $4,291
Ford (Ford, Lincoln, Mercury, Volvo) $3,095 $3,040 $3,505
General Motors (Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, Saturn) $3,103 $4,001 $3,138
Honda (Acura, Honda) $1,203 $1,253 $1,374
Hyundai (Hyundai, Kia) $2,096 $2,027 $3,071
Nissan (Infiniti, Nissan) $2,455 $2,157 $2,153
Toyota (Lexus, Scion, Toyota) $1,550 $1,665 $1,994
Industry Average $2,382 $2,542 $2,708

In January 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $1.67 billion, down 35.9 percent from December 2009. Chrysler, Ford and General Motors spent an aggregate of $1.0 billion, or 60.2 percent of the total; Japanese manufacturers spent $424 million, or 25.1 percent; European manufacturers spent $149 million, or 8.9 percent; and Korean manufacturers spent $96 million, or 5.8 percent.

"February could prove interesting. We'll see the usual President's Day sales and, in addition, we could see some deals from Toyota as it tries to lure weary shoppers back to its showrooms after its recalls and sales stoppage. And Toyota competitors won't stand still for that. As they demonstrated in January, they'll do what they can to capitalize on Toyota's weakened state," reported Edmunds.com Senior Analyst Michelle Krebs in her report on AutoObserver.com.

Among vehicle segments, large trucks had the highest average incentives, $3,743 per vehicle sold, followed by large SUV at $3,724. Subcompact cars had the lowest average incentives per vehicle sold, $1,116, followed by sport cars at $1,250. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 11.0 percent, followed by large cars at 9.6 percent of sticker price. Premium sport cars averaged the lowest with 3.2 percent and premium luxury cars followed with 3.7 percent of sticker price.

Comparing all brands, in January MINI spent the least, $226 followed by Scion at $320 per vehicle sold. At the other end of the spectrum, HUMMER spent the most, $5,733, followed by Lincoln at $5,484 per vehicle sold. Relative to their vehicle prices, Saturn and HUMMER spent the most, 18.4 percent and 15.2 percent of sticker price, respectively; while MINI spent 1.0 and Scion spent 1.9 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.

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