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Incentives Tick Up in May, Edmunds Reports

May 31, 2012

Average True Cost of Incentives® (TCISM) by Car Manufacturer

Manufacturer

May-12

Apr-12

May-11

May 2012 vs

Apr   2012

May 2012 vs

May   2011

Chrysler

$2,567

$2,535

$2,400

1.3%

7.0%

Ford

$2,594

$2,373

$2,475

9.3%

4.8%

GM

$3,417

$3,339

$3,245

2.3%

5.3%

Honda

$1,207

$1,223

$983

-1.3%

22.8%

Nissan

$2,260

$2,073

$2,221

9.0%

1.8%

Toyota

$1,458

$1,374

$1,250

6.1%

16.6%

Industry

$2,135

$2,055

$2,122

3.9%

0.6%

SANTA MONICA, Calif. — Auto manufacturers increase their incentive spend in May, one month after spending hit its lowest level in almost seven years, Edmunds.com reported.

The vehicle information site’s True Cost of Incentives measure showed that auto manufacturers spent $2,135 per vehicle sold this month, a 3.9 percent increase from April and a 0.6 percent increase from May 2011.

“It’s likely that incentives will continue a slow but steady rise in the coming months,” says Edmunds.com Senior Analyst Jessica Caldwell. “There will be bigger discounts available on 2012 models through the summer to help dealers clear the way for incoming 2013 models. In fact, 2013 models already account for about 6.5 percent of new car sales.”

Among the Big Six manufacturers, Ford increased its spending the most last month, upping its incentives 9.3 percent over April. Nissan followed behind with a month-over-month incentives increase of 9 percent. Edmunds.com analysts say that both increases are corrective measures after both automakers slashed incentive spending in April and suffered hits to their market shares as a result.

Among brands, Chevrolet offered the biggest discounts this month, offering an average of 10.7 percent off MSRP (compared to 11.0 percent in April). One brand that stood out this month for stepping back its discounts was Mazda. In April, the Japanese automaker offered the fourth highest discount (9.3 percent off MSRP) of any automotive brand. But in May, Mazda fell to the 12th spot with average discounts at just 7.2 percent off MSRP.

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