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Auto Incentives Down to Pre-Recession Levels in December

Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. market was $2,528 per vehicle sold in December 2010, up $64, or 2.6 percent, from November 2010, but down $26, or 1.0 percent, from December 2009.

by Staff
January 11, 2011
3 min to read


SANTA MONICA, Calif. — Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. market was $2,528 per vehicle sold in December 2010, up $64, or 2.6 percent, from November 2010, but down $26, or 1.0 percent, from December 2009.

“Incentives have dropped back to pre-recession levels after surging in 2009 as manufacturers tried anything they could think of to lure customers to buy their vehicles,” stated Edmunds.com Senior Analyst Michelle Krebs in her report on AutoObserver.com. “While industry averages are down, spending by Japanese automakers in aggregate is up, led by Toyota as it tries to recoup from recalls that triggered a sales slump.”

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According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,301 per vehicle sold in December 2010, up from $3,215 in November 2010. From November 2010 to December 2010, European automakers increased incentives spending by $18 to $2,376 per vehicle sold; Japanese automakers increased incentives spending by $34 to $1,821 per vehicle sold; and Korean automakers decreased incentives spending by $118 to $1,508 per vehicle sold.


True Cost of Incentives for the Top Six Automakers

Automaker


December 2010


November 2010


December 2009

Chrysler Group


$3,349


$3,099


$2,585

Ford


$3,188


$3,173


$3,049

General Motors  


$3,370


$3,300


$4,017

Honda  


$1,521


$1,419


$1,257

Nissan  


$2,121


$2,180


$2,161

Toyota  


$1,983


$1,951


$1,666

Industry Average


$2,528


$2,464


$2,554


“Looking at year-end averages, Honda, Nissan and Toyota are each spending more than they did in 2008 or 2009; on the other hand, each of the domestic automakers dramatically lowered its incentives in 2010 and yet collectively gained market share,” reported Edmunds.com Analyst Ivan Drury.


Annual True Cost of Incentives for the Top Six Automakers

Automaker



2008



2009



2010

Chrysler Group  



$ 3,869



$ 4,131



$ 3,195

Ford  



$ 3,369



$ 3,334



$ 3,173

General Motors  



$ 3,573



$ 3,889



$ 3,515

Honda  



$ 1,201



$ 1,276



$ 1,563

Nissan



$ 2,098



$ 2,455



$ 2,519

Toyota  



$ 1,317



$ 1,598



$ 2,119

Industry Average



$ 2,588



$ 2,794



$ 2,608


In December 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $2.85 billion, up 32.9 percent from November 2010. Chrysler, Ford and General Motors spent an aggregate of $1.7 billion, or 59.7 percent of the total; Japanese manufacturers spent $774 million, or 27.2 percent; European manufacturers spent $250 million, or 8.8 percent; and Korean manufacturers spent $125 million, or 4.4 percent.

Among vehicle segments, premium sport cars had the highest average incentives, $5,757 per vehicle sold, followed by large cars at $4,686. Subcompact cars had the lowest average incentives per vehicle sold, $1,212, followed by vans at $1,737. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 14.7 percent, followed by large trucks at 10.3 percent of sticker price. Premium luxury cars averaged the lowest with 3.3 percent and luxury SUVs followed with 4.3 percent of sticker price.

Comparing all brands, in December Subaru spent the least, $522, followed by Scion at $881 per vehicle sold. At the other end of the spectrum, Saab spent the most, $7,998, followed by Mercury at $6,448 per vehicle sold. Relative to their vehicle prices, Mercury and Saab spent the most, 21.6 percent and 19.3 percent of sticker price, respectively; while Porsche spent 1.6 and Subaru spent 2.0 percent.

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