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April Incentives Decline for Most Brands

Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. was $2,654 per vehicle sold in April 2010, down $152, or 5.4 percent, from March 2010, and down $403, or 13.2 percent, from April 2009.

by Staff
May 3, 2010
3 min to read


SANTA MONICA, Calif. — Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. was $2,654 per vehicle sold in April 2010, down $152, or 5.4 percent, from March 2010, and down $403, or 13.2 percent, from April 2009.

"Many incentives programs were continued from March into April and their effectiveness waned over time," stated Jessica Caldwell, director of industry analysis for Edmunds.com. "The automakers that need extra marketing support will have to pull out a new trick for May.”

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According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,286 per vehicle sold in April 2010, down from $3,410 in March 2010. From March 2010 to April 2010, European automakers decreased incentives spending by $235 to $2,536 per vehicle sold; Japanese automakers decreased incentives spending by $122 to $2,181 per vehicle sold; and Korean automakers decreased incentives spending by $390 to $1,792 per vehicle sold.

True Cost of Incentives for the Top Seven Automakers

Automaker

April 2010

March 2010

April 2009

Chrysler Group

$3,374

$3,300

$4,383

Ford

$3,214

$3,335

$3,618

General Motors

$3,273

$3,507

$4,107

Honda

$1,787 *

$1,785

$1,480

Hyundai

$1,792

$2,182

$3,427

Nissan

$2,451

$2,394

$2,767

Toyota

$2,498

$2,743*

$1,634

Industry Average

$2,654

$2,806

$3,057

*Denotes a record

"Honda, Mini, Porsche and Toyota, who are traditionally very conservative in their offers, currently have incentives that are remarkably high for their individual brands," Edmunds.com Senior Analyst Michelle Krebs reported in AutoObserver.com. “Meanwhile, companies with momentum such as Ford, General Motors and Hyundai are able to cut back and let their products sell themselves.”

In April 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $2.62 billion, down 12.3 percent from March 2010. Chrysler, Ford and General Motors spent an aggregate of $1.4 billion, or 54.1 percent of the total; Japanese manufacturers spent $859 million, or 32.7 percent; European manufacturers spent $204 million, or 7.8 percent; and Korean manufacturers spent $144 million, or 5.5 percent.

Among vehicle segments, large trucks had the highest average incentives, $4,471 per vehicle sold, followed by luxury car at $3,526. Subcompact cars had the lowest average incentives per vehicle sold, $1,350, followed by sport cars at $1,428. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.1 percent, followed by large cars at 11.2 percent of sticker price. Premium luxury cars averaged the lowest with 2.8 percent and premium sport cars followed with 3.6 percent of sticker price.

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Comparing all brands, in April Scion spent the least, $406 followed by Subaru at $737 per vehicle sold. At the other end of the spectrum, Saab spent the most, $6,261, followed by HUMMER at $5,674 per vehicle sold. Relative to their vehicle prices, Saab and smart spent the most, 15.9 percent and 15.2 percent of sticker price, respectively; while Scion spent 2.3 and Porsche spent 2.7 percent.

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