SANTA MONICA, Calif. – (BUSINESS WIRE)- Dec. 1, 2006 – Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,237 per vehicle sold in November 2006, down $161, or seven percent, from October 2006, and down $147, or six percent, from November 2005.
Edmunds.com’s monthly True Cost of Incentives(SM) (TCI(SM)) report takes into account all manufacturers’ 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.
The industry’s aggregate incentives spending are estimated to have totaled approximately $2.7 billion in November, down from $2.9 billion in October. Chrysler, Ford and General Motors (GM) spent an aggregate of $2 billion, or 74 percent of the total; Japanese manufacturers spent $432 million, or 16 percent; European manufacturers spent $200 million, or seven percent; and Korean manufacturers spent $89 million, or three percent.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,174 per vehicle sold in November, down from $3,298 in October 2006. Compared with last month, Chrysler’s incentives spending was up $88 to $4,224 per vehicle sold; Ford’s incentives spending was down $88 to $3,326 per vehicle sold; and General Motors decreased its incentives by $252 to $2,539 per vehicle sold.
“November was another month of high incentives, as manufacturers are pushing 2006 models off dealership lots, particularly SUVs and trucks,” said Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. “During winter months, we expect to see a rise in SUV and truck sales, which should help the domestic automakers.”
From October to November, European automakers decreased incentives spending by $257 to $2,159 per vehicle sold; Japanese automakers decreased incentives spending by $141 to $982 per vehicle sold; and Korean automakers decreased incentives spending by $23 to $1,709 per vehicle sold.
Comparing all brands, in November Scion spent the least, $88, followed by Honda at $380 per vehicle sold. At the other end of the spectrum, Jeep spent the most, $5,398, followed by Jaguar at $4,340 per vehicle sold. Relative to their vehicle prices, Jeep and Dodge spent the most, 19.8 percent and 14.1 percent of sticker price, respectively, while Scion and Lexus spent the least at 0.6 percent and 1.5 percent, respectively.
Among vehicle segments, large SUVs had the highest average incentives, $4,608 per vehicle sold, followed by large trucks at $3,897. Compact cars had the lowest average incentives per vehicle sold, $689, followed by sports cars at $805. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 12.6 percent, followed by large SUVs at 12.2 percent of sticker price. Luxury sport cars averaged the lowest, 2.4 percent, followed by sports cars at 2.7 percent of sticker price.
About Edmunds.com True Cost of Incentives(SM) (TCI(SM))
Edmunds.com’s TCI(SM) is a comprehensive monthly report that measures automobile manufacturers’ cost of incentives on vehicles sold in the United States. These costs are reported on a per vehicle basis for the industry as a whole, for each manufacturer, for each make sold by each manufacturer and for each model of each make. TCI covers all aspects of manufacturers’ various incentives programs (except volume and similar bonus programs), including dealer cash, manufacturer rebates and consumer savings from subvented APR and lease programs (including subvented lease residual values used in manufacturer leasing programs). Data for the industry, the manufacturers and the makes are derived using weighted averages and are based on actual monthly sales and financing activity.