Car Shoppers Lured by Perception of Great Holiday Deals

By Michelle Krebs December 1, 2010

November 2010 TCI chart - 554.JPGDespite heavy advertising of seemingly attractive holiday deals, automaker incentives edged up only a bit, according to estimates by Nonetheless, the perception of great deals lured shoppers to showrooms over Thanksgiving in droves.

"Thanksgiving weekend drew out a lot of shoppers," said Jessica Caldwell, director of Industry Analysis. "Foot traffic was up at dealerships all over the country."

Automakers post November sales results Wednesday. forecasts a Seasonally Adjusted Annual Rate (SAAR) of sales of 12.2 million vehicles.

Collective Spending

Domestic automakers accounted for all of the tiny increase in incentive spending as automakers from outside the U.S. lowered their spends.

Combined incentives spending for domestic manufacturers averaged $3,221 per vehicle sold in November, up from $3,115 in October.. From October to November

- European automakers decreased incentives spending by $94 to $2,285 per vehicle sold;

- Japanese automakers decreased incentives spending by $28 to $1,784 per vehicle sold;

- Korean automakers decreased incentives spending by $27 to $1,571 per vehicle sold.

Nov. 2010 TCI - by region table - 535.JPG

In November, the industry's aggregate incentive spending is estimated to have totaled approximately $2.14 billion, down 7.4 percent from October. Chrysler, Ford and General Motors spent an aggregate of $1.3 billion, or 59.3 percent of the total; Japanese manufacturers spent $570 million, or 26.7 percent; European manufacturers spent $193 million, or 9.0 percent; and Korean manufacturers spent $107 million, or 5.0 percent.Nov. 2010 TCI - by region - pie chart.jpg

By Segment, % of Sticker

Among vehicle segments, premium sport cars had the highest average incentives - $5,811 per vehicle sold, followed by premium luxury cars at $5,057.

Subcompact cars had the lowest average incentives per vehicle sold - $1,272 followed by sport cars at $1,422.

Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 13.2 percent, followed by large trucks at 10.3 percent of sticker price.

Sport cars averaged the lowest with 3.8 percent, and luxury SUVs followed with 4.6 percent of sticker price.

By Brand

Comparing all brands, in November smart spent the least, $519 per vehicle, followed by Subaru at $548 per vehicle sold.

At the other end of the spectrum, Mercury spent the most, $6,927 per vehicle, followed by Cadillac at $5,340 per vehicle sold.

Relative to their vehicle prices, Mercury and Saab spent the most, 23.2 percent and 12.6 percent of sticker price, respectively. Spending the least in relation to their price were Porsche at 1.5 percent and Subaru at 2.1 percent.

By Maker

Compared with November last year, GM, which still has the highest per vehicle incentive, has cut its incentive spend by the largest percentage -- 23 percent -- of all Big 6 automakers. The industry decline was 9 percent year to year.

Chrysler also lowered incentives from last year by 7 percent. Chrysler's lower incentives came despite the fact that it, more than any other automaker, had to clear away carryover 2010 models. Chrysler is estimated to have sold the largest percentage of 2010 models in November among the Big 6 automakers; nearly 59 percent of Chrysler's November sales were 2010 models, according to's analysis.

Toyota, still trying to dig itself out from the sales decline it experienced due to its many recalls this year, has increased incentives most of the Big 6 at 10 percent. Honda, which rides Toyota's coattails, also boosted its incentives by 10 percent on a year-to-year basis.

Toyota had the second most inventory of leftovers to sell and it didn't offer much to move them. Toyota lowered incentives from October to November and estimates 40 percent of Toyota's November sales were 2010 models.

"Toyota hasn't been offering consumers enough of a discount on 2010 model year vehicles to move them quickly," said analyst Ivan Drury.
Nov. 2010 TCI - % changes.JPG's monthly True Cost of Incentives 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, 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.

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carguy58 says: 8:00 AM, 12.01.10

Sounds like Toyota should lower its inventories because they are not gonna have the market share at least in the next 6 months that they had last year at this time. I think a new 2012 Camry and 2012 RAV 4 will come out in September of 2011 maybe so sales will go up for tham a little late next year,

Chrysler should lower its inventories to. Most of their product for 2011 are all new refreshed and not all brand new models except for the Jeep Cherokee I think. I read on this site that the average day to turn a Chrysler product is like 53 days compared to like 121 days last year.


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