As automakers try to tempt bargain-hunting car shoppers with generous incentives, both new vehicle sticker prices and net prices (new vehicle transaction prices adjusted for incentives) are quietly climbing, according to Edmunds.com, an online resource for automotive information.

In December 2003, the sales-weighted average new vehicle sticker price was $30,481, 2.0 percent higher than in November 2003 and 4.6 percent higher than in December 2002.

In December 2003, the sales-weighted average net price was $26,077 -- 14 percent below MSRP. The average net price has been steadily increasing since July 2003 when it was $24,179, 17 percent below MSRP. As a point of comparison, the average net price in December 2002 was $24,922, 14 percent below average MSRP.

“Some automakers have begun to institutionalize incentives into their overall pricing strategy; in other words, they raise incentives and prices in tandem,” said Dr. Jane Liu, executive director of data analysis for Edmunds.com. “It’s working relatively well for the automakers, especially as improved products and a brighter economic situation is narrowing the difference between asking prices and net prices.”

In particular, the domestic automakers have been enjoying a steady increase in net price since mid-year when MSRP increases helped minimize the negative impact of incentives. In December 2003, the average domestic net price was 18.8 percent below MSRP, a marked improvement over July 2003 when the difference was 20.9 percent. December 2002 was slightly better for the domestics, as average net price was 18.4 percent below MSRP.

During 2003 Japanese manufacturers closed the gap between net price and MSRP, improving from 8.4 percent in December 2002 to 7.5 percent in December 2003. In the same period Korean manufacturers saw net prices and MSRPs drift further apart, from 9.4 percent in December 2002 to 15.2 percent in December 2003. The gap for European manufacturers was generally constant over the year, as average net prices were 4.6 percent below MSRP in December 2002 and 4.8 percent in December 2003.

From November to December 2003 the Edmunds.com New Vehicle Price Index rose 0.2 percent to 100.8 (base = 100 set in January 2002) to its highest point since its inception in January 2002. From January to December 2003, the Edmunds.com New Vehicle Price Index has increased by 2.8 percent from 97.9 (base = 100 set in January 2002) to 100.8. The December 2003 index was the same as the prior month.

Several segments posted gains in 2003: sports cars saw the largest increase at 9.3 percent, followed by large trucks at 5.1 percent. Vans had the most significant decline at 2.7 percent, followed by compact cars with a decrease of 2.2 percent.

Industry average "days-to-turn," which measures how many days on average it took to sell vehicles after they arrived at dealerships, was 61 days in December, compared to 62 in November 2003 and 55 in December 2002. Mitsubishi had the longest days-to-turn at 141, followed by Isuzu at 140. The quickest inventory turnaround was for Mini at 14 days, followed by Lexus at 20 days.

This data was released Jan. 21 with the Edmunds Price Index for new vehicles (EPI-N), which reflects price shifts for the industry as a whole, and can be analyzed by different market segmentation. Similar to the Consumer Price Index, the EPI-N measures the average changes in retail prices for a fixed basket of new vehicles with fixed options over time for the purpose of trend analysis.

Edmunds.com also analyzes transaction prices and net prices by country of origin, manufacturer, make and model, reflecting manufacturer-to-consumer rebates, including low APR and special lease programs.

About Edmunds.com, Inc.

Edmunds.com (www.edmunds.com) is an online resource for automotive information.

Its comprehensive set of data, tools and services, including Edmunds.com True Market Value® pricing, is generated by Edmunds Data Services and is licensed to third parties. For example, the company supplies more than 800,000 pages of content for the auto sections of AOL and NYTimes.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts.

Edmunds.com was named "best car research" site by Forbes ASAP, is viewed by consumers as the "most useful Web site" according to the J.D. Power and Associates New Autoshopper.com Studies(SM) for both 2001 and 2002, and was ranked first in the Survey of Car-Shopping Web Sites as reported by The Wall Street Journal. The company is headquartered in Santa Monica, Calif., and maintains a satellite office in Troy, Mich.