Spending Increases as Automakers Entice Toyota Customers
“Incentive spending went up last month for most major automakers as they tried to lure Toyota buyers to their brand,” says Jessica Caldwell, director of industry analysis for Edmunds.com. “Toyota needs to stay competitive in this area while rebuilding confidence in their vehicles.”
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,394 per vehicle sold in February 2010, up from $2,968 in January 2010. From January 2010 to February 2010, European automakers increased incentives spending by $12 to $2,494 per vehicle sold; Japanese automakers increased incentives spending by $270 to $1,853 per vehicle sold; and Korean automakers decreased incentives spending by $630 to $1,676 per vehicle sold.
In February 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $2.03 billion, up 24.8% from January 2010. Chrysler, Ford and General Motors spent an aggregate of $1.2 billion, or 58% of the total; Japanese manufacturers spent $571 million, or 28.3%; European manufacturers spent $165 million, or 8.2%; and Korean manufacturers spent $110 million, or 5.5%.
“February was the first time since August 1998 that Ford outsold General Motors,” says Edmunds.com Senior Analyst Michelle Krebs in her report on AutoObserver.com. “Ford has a lot of momentum right now, while GM has essentially stopped selling four of its brands.”
Among vehicle segments, large trucks had the highest average incentives, $4,194 per vehicle sold, followed by premium luxury car at $4,023. Subcompact cars had the lowest average incentives per vehicle sold, $1,205, followed by sport cars at $1,394. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 12.4%, followed by large cars at 11.4% of sticker price. Premium sport cars averaged the lowest with 1.7% and sport cars followed with 4.2% of sticker price.
Comparing all brands, in February smart spent the least, $341 followed by Scion at $426 per vehicle sold. At the other end of the spectrum, Lincoln spent the most, $5,568, followed by Hummer at $5,195 per vehicle sold. Relative to their vehicle prices, Saturn and Hummer spent the most, 14.9% and 13.6% of sticker price, respectively; while Porsche spent 1.4 and smart spent 2.3%.
Edmunds.com's monthly True Cost of Incentives (TCI) 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.