Incentive Spending Leads to Most Expensive June on Record
Edmunds.com estimated that the average automotive manufacturer incentive in the United States was $2,930 per vehicle sold in June 2009, down $22, or 0.8 percent, from May 2009, but up $489, or 20.0 percent, from June 2008.
SANTA MONICA, Calif. — Edmunds.com estimated that the average automotive manufacturer incentive in the United States was $2,930 per vehicle sold in June 2009, down $22, or 0.8 percent, from May 2009, but up $489, or 20.0 percent, from June 2008.
"June incentives have never been higher, but we anticipate that the tide is about to turn," stated Jesse Toprak, executive director of industry analysis for Edmunds.com. "The effects of recent production cuts are starting to be felt, and as supply dwindles, incentives will fall.”
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,821 per vehicle sold in June 2009, up from $3,736 in May 2009. From May 2009 to June 2009, European automakers decreased incentives spending by $448 to $3,238 per vehicle sold; Japanese automakers decreased incentives spending by $169 to $1,729 per vehicle sold; and Korean automakers increased incentives spending by $252 to $3,083 per vehicle sold.
True Cost of Incentives for the Top Seven Automakers
Automaker June 2009 May 2009 June 2008
Chrysler Group $4,873 $4,087 $3,589
Ford $3,531 $3,626 $2,832
General Motors $3,566 $3,693 $3,662
Honda $1,686* $1,652 $1,333
Hyundai $3,083 $2,831 $1,958
Nissan $2,631 $2,718 $1,922
Toyota $1,362 $1,714 $1,213
Industry Average $2,930 $2,952 $2,441
* Denotes an all-time record
In June 2009, the industry's aggregate incentive spending is estimated to have totaled approximately $2.6 billion, down 4.7 percent from May 2009. Chrysler, Ford and General Motors spent an aggregate of $1.6 billion, or 60.3 percent of the total; Japanese manufacturers spent $574 million, or 22.1 percent; European manufacturers spent $253 million, or 9.7 percent; and Korean manufacturers spent $206 million, or 7.9 percent.
"This is the third consecutive month in which Honda set a new record for its spending,” Toprak told Edmunds’ AutoObserver.com. “Car-shoppers are focused on value right now, and some automakers are making a concerted effort to market their cars from that angle.”
Among vehicle segments, premium sport cars had the highest average incentives, $5,481 per vehicle sold, followed by large trucks at $4,160. Subcompact cars had the lowest average incentives per vehicle sold, $1,207, followed by compact cars at $2,075. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows minivans averaged the highest, 13.1 percent, followed by large cars at 12.9 percent of sticker price. Premium luxury cars averaged the lowest with 4.9 percent and premium sport cars followed with 5.9 percent of sticker price.
Comparing all brands, in June Scion spent $205 followed by MINI at $579 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $6,069, followed by HUMMER at $5,828 per vehicle sold. Relative to their vehicle prices, Chrysler and Dodge spent the most, 17.8 percent and 16.8 percent of sticker price, respectively; while Scion spent 1.2 and MINI spent 2.6 percent.
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