Industry Sets New Record on Incentive Spending in March, Says Edmunds.com
Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. was $3,169 per vehicle sold in March 2009, up $171, or 5.7 percent, from February 2009, and up $733, or 30.1 percent, from March 2008.
SANTA MONICA, Calif. — Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. was $3,169 per vehicle sold in March 2009, up $171, or 5.7 percent, from February 2009, and up $733, or 30.1 percent, from March 2008.
This is the highest industry average on record. The previous record was set September 2004 when zero percent financing was extremely popular and drove the average incentive spend to $3,146 per vehicle sold.
"Automakers are pulling every lever in their effort to attract buyers, as evidenced by the new programs from Ford and GM," stated Jesse Toprak, executive director of industry analysis for Edmunds.com. “The typical incentive programs simply do not resonate in today’s economy.”
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $4,505 per vehicle sold in March 2009, up from $4,134 in February 2009. From February 2009 to March 2009, European automakers increased incentives spending by $326 to $3,398 per vehicle sold; Japanese automakers decreased incentives spending by $58 to $1,628 per vehicle sold; and Korean automakers increased incentives spending by $360 to $3,572 per vehicle sold.
True Cost of Incentives for the Top Seven Automakers
Automaker March 2009 February 2009 March 2008
Chrysler $4,927 $5,608* $4,068
Ford $3,675 $3,384 $2,972
General Motors $4,836* $3,681 $3,248
Honda $1,306 $1,249 $1,231
Hyundai $3,572* $3,212 $2,123
Nissan $2,298 $2,572 $1,931
Toyota $1,601 $1,682 $849
Industry Average $3,169* $2,998 $2,436
* Denotes a record for the indicated automaker
In March 2009, the industry's aggregate incentive spend is estimated to have totaled approximately $2.4 billion, up 19.0 percent from February 2009. Chrysler, Ford and General Motors spent an aggregate of $1.5 billion, or 61.9 percent of the total; Japanese manufacturers spent $511 million, or 20.8 percent; European manufacturers spent $227 million, or 9.3 percent; and Korean manufacturers spent $196 million, or 7.9 percent.
"Hyundai is particularly interesting to watch right now," commented Edmunds' AutoObserver.com senior editor Michelle Krebs. "The company has a lot of momentum and is spending a remarkable amount of money to capitalize on it."
Among vehicle segments, premium sport cars had the highest average incentives, $6,972 per vehicle sold, followed by large SUVs at $5,323. Subcompact cars had the lowest average incentives per vehicle sold, $949, followed by compact cars at $1,830. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large car averaged the highest, 14.9 percent of sticker price, followed by large trucks at 14.6 percent. Premium luxury cars averaged the lowest with 3.63 percent of sticker price, and subcompact cars followed with 5.8 percent.
Comparing all brands, in March Scion spent the least, $87, followed by MINI at $553 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $6,839, followed by Lincoln at $5,942 per vehicle sold. Relative to their vehicle prices, Kia and Chrysler spent the most, 22.6 percent and 17.6 percent of sticker price, respectively; while Scion spent 0.5 and MINI spent 2.5 percent.
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