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Incentives Rise for 2010 Model Year Vehicles, Says Edmunds.com

December 02, 2009

SANTA MONICA, Calif. — Edmunds.com estimated today that the average automotive manufacturer incentive in the U.S. was $2,713 per vehicle sold in November 2009, up $52, or 1.9 percent, from October 2009, and up $32, or 1.9 percent, from November 2008.

“Now that 2010 models are piling up on dealership lots, incentives on the new models are increasing, up 21 percent from last month,” stated Jessica Caldwell, director of industry analysis for Edmunds.com.

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,712 per vehicle sold in November 2009, down from $3,844 in October 2009. From October 2009 to November 2009, European automakers increased incentives spending by $200 to $3,186 per vehicle sold; Japanese automakers increased incentives spending by $117 to $1,547 per vehicle sold; and Korean automakers decreased incentives spending by $38 to $1,946 per vehicle sold.

 

 

True Cost of Incentives for the Top Seven Automakers

 

Automaker

November 2009

October 2009

November 2008

 

Chrysler Group

$ 3,298

$ 3,753

$ 3,514

 

Ford

$ 3,124

$ 3,052

$ 3,818

 

General Motors

$ 4,270

$ 4,398

$ 3,350

 

Honda

$ 1,195

$ 850

$ 1,115

 

Hyundai

$ 1,946

$ 1,984

$ 2,607

 

Nissan

$ 2,011

$ 2,544

$ 2,248

 

Toyota

$ 1,704

$ 1,469

$ 2,005

 

Industry Average

$ 2,713

$ 2,661

$ 2,681

 

 

In November 2009, the industry’s aggregate incentive spending is estimated to have totaled approximately $1.92 billion, down 13.6 percent from October 2009. Chrysler, Ford and General Motors spent an aggregate of $1.2 billion, or 62.4 percent of the total; Japanese manufacturers spent $421 million, or 21.8 percent; European manufacturers spent $219 million, or 11.4 percent; and Korean manufacturers spent $84 million, or 4.4 percent.

“Not surprisingly, GM is forced to spend handsomely on incentives — using taxpayer money — to wind down the Saturn and Pontiac brands and to keep Hummer and Saab afloat,” commented Edmunds’ AutoObserver.com Senior Editor Michelle Krebs.

Among vehicle segments, premium sport cars had the highest average incentives, $9,429 per vehicle sold, followed by large SUVs at $4,974. Subcompact cars had the lowest average incentives per vehicle sold, $1,090, followed by compact cars at $1,523. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.9 percent, followed by large SUVs at 12.3 percent of sticker price. Premium luxury cars averaged the lowest with 5.3 percent and sport cars followed with 5.6 percent of sticker price.

Comparing all brands in November, Scion spent $375 followed by smart at $586 per vehicle sold. At the other end of the spectrum, HUMMER spent the most, $5,975, followed by Cadillac at $5,787 per vehicle sold. Relative to their vehicle prices, Pontiac and Saturn spent the most, 19.2 percent and 16.8 percent of sticker price, respectively; while Scion spent 2.2 and Subaru spent 2.6 percent.

“Increased leasing incentives accounted for significant TCI boosts for Honda and Toyota,” observed Caldwell.

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