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Tags: march 2008 08 new car incentive incentives

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March 2008 New Vehicle Incentives
SANTA MONICA, Calif. — The average automaker incentive was largely unchanged in March compared with February, but incentives generally are likely to rise for the next several months as automakers try to break the sales slump, Edmunds.com predicts.

"Incentives are likely to rise through the spring and summer," said Jesse Toprak, executive director of Industry Analysis for Edmunds.com. “We anticipate that this will be especially true for the European automakers, as long as the euro remains strong.”

Edmunds.com estimates the average automotive manufacturer incentive in the U.S. was $2,519 per vehicle sold in March, essentially unchanged from February but up $94, or 3.9 percent, from March 2007.

Edmunds.com's monthly True Cost of Incentives (TCI) report takes into account all automakers' various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.

Edmunds.com estimates the combined incentives spending for domestic manufacturers averaged $3,424 per vehicle sold in March, up from $3,384 in February. From February to March, European automakers increased incentives spending by $236 to $3,067 per vehicle sold; Japanese automakers decreased incentives spending by $73 to $1,295 per vehicle sold; and Korean automakers increased incentives spending by $352 to $2,126 per vehicle sold.

In March the industry's aggregate incentive spending is estimated to have totaled approximately $3.34 billion, up 13.6 percent from February 2008. Chrysler, Ford and General Motors spent an aggregate of $2.3 billion, or 67.7 percent of the total; Japanese manufacturers spent $658 million, or 19.7 percent; European manufacturers spent $290 million, or 8.7 percent; and Korean manufacturers spent $130 million, or 3.9 percent.

Chrysler pulled up the industry average incentives spend in March. The investment in incentives seems aimed at jump-starting sales to improve the company’s bottom-line numbers. This coincides with its recent announcement of a two-week summer shutdown, Monday's revelation that Chrysler will give some salaried retirees lump-sum payments instead of paying for their life insurance, and other drastic measures to reduce operating expenses.

Among vehicle segments, large trucks had the highest average incentives, $4,368 per vehicle sold, followed by large SUVs at $4,094. Compact cars had the lowest average incentives per vehicle sold, $1,023, followed by sport cars at $1,574.

Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.6 percent, followed by large cars at 13.1 percent of sticker price. Sports cars averaged the lowest, 5.3 percent, followed by luxury sport cars at 5.7 percent of sticker price.

Comparing all brands, trends from the past year continued: BMW's Mini spent the least — virtually nothing — followed by Scion at $131 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $5,532, followed by Saab at $5,501 per vehicle sold. Relative to their vehicle prices, Dodge spent the most, 16.7 percent and Saab followed in at 15.3; Mini spent virtually nothing and Scion spent just 0.8 percent. Read Article
March 2008 New Vehicle Incentives



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r15mohdr15mohd - 4/4/2008 9:36:27 AM
-1 BoostDrop the Boost Up the Boost
as pure as your point is...expect your boost rating to go down for bashing the badge-whores.



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EnnNorakEnnNorak - 4/4/2008 12:19:39 PM
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The only incentives that should be allowed by law are those that are fully disclosed and paid directly to the retail customer by the factory. This prevents dealers from lying about factory to dealer incentives and often pocketing same without passing them on to the consumer. The only way for consumers to get a good deal presently is to reverse auction several dealers with lo-ball offers, gradually increasing these offers until some desperate dealer accepts the offer. It would be far better to be able to purchase a vehicle directly from the manufacturer over the Internet at fully disclosed pricing with the retail customer specifying a delivering dealer who earns a nominal and fair fully disclosed commission.

Manufacturers could even perform all "pre-delivery" service at the factory, shrink wrap the vehicle, and ship it directly to the retail customer's door. I hate the way the industry currently markets and sells the product -- it is not user friendly and the retail customer should not have to work so hard to do business.

Manufacturers should not be pressuring dealers to construct overly expensive fancy showrooms that add no value to the customer's purchasing process. Retail customers inevitably end up paying for the depreciation of these buildings without a hope in hell of ever recovering a cent if the dealership is sold at a profit.



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ChicaneShooterChicaneShooter - 4/4/2008 6:00:11 AM
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the only group to DECREASE incentives, had the lowest to begin with!

guess the innate higher DESIREABILITY this reflects, is the reason 'jap cars' generate so much hate.



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S4cabriofoxoneS4cabriofoxone - 4/4/2008 9:48:13 AMView My AgentSpace
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Yup. I secretly get turned on every time I see one of those Corollas.


tcatnattcatnat - 4/4/2008 6:14:07 AM
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Hopefully the incentives continue to increase. I need to buy a new car by August.

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EnnNorakEnnNorak - 4/4/2008 12:21:53 PM
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I'd like the Canadian retail prices to be fully harmonized with U.S. MSRP -- we are still getting ripped off in Canada and I also need a car soon.


ShredmoShredmo - 4/4/2008 1:50:05 PM
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I always thought the US's economy was independant of Canada's. If you want to pay US prices, why don't you just import a car from the US like many other smart Canadians have done?

I recall the good 'ol days when I could buy a pint in Toronto for ~$2.30 US. I didn't complain when I returned to the states and had to pay what I considered full price. Personally, I'd try to use the difference in currency values to your advantage, if you can.


silver1silver1 - 4/4/2008 6:56:13 PM
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I Guess okay mow to say that Toyota now sale themselves

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huu76huu76 - 4/4/2008 10:45:55 PM
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I saw on the idiot box the other day that in the U.S., the Tundra is now available with 0% for 3yrs (or something ridiculous like that).
Contrast that to Canada still demanding 6.9% and 8.5% for the Tundra, however, they also say Canadians are more likely to purchase trucks for work instead of as a gun-rack holder.

But I would'nt have guessed the Europeans need 2.5x the incentives to move their cars compared to the Japanese makes.

Ennnorak,
Parity would have to last for atleast 2 years before most prices are harmonized, so we've got another 18 months to go. But even then, our labour costs are higher so unless all the manufacturing jobs go back to the U.S., our cars will cost more to make because of parity.

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ChicaneShooterChicaneShooter - 4/6/2008 6:57:59 AM
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euro brands NEED higher incentives to compensate for their initial overpricing, AND LOWER RELIABILITY. (lower than even american brands.)

sellers can set whatever prices they choose. in totally free, unsubsidized markets, it is ALWAYS THE BUYERS, however, who DECIDE what any given product is truly WORTH.



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