Thursday, Dec. 02, 2010, 01:59 AM UPDATED 1:31 PMBy Auto Remarketing Staff
SANTA MONICA, Calif. -
Edmunds.com reported Wednesday that automakers spent marginally more on November incentives than they did during the previous month, but the average wasn’t nearly as much as what the manufacturers handed out a year ago.
Site analysts discovered Wednesday that the average incentive in the U.S. was $2,470 per vehicle sold in November. They said that amount was $31 or 1.3-percent higher than October’s average, but it was $255 or 9.4-percent lower than the same month last year.
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,221 per vehicle sold in November, up from $3,115 in October. The site determined European, Japanese and Korean automakers all lowered their average incentives from the previous month.
—European companies: Down $94 to $2,285 per vehicle sold.
—Japanese companies: Down $28 to $1,784 per vehicle sold.
—Korean companies: Down $27 to $1,571 per vehicle sold.
“Once again, perception trumped reality as car-shoppers pursued expected bargains during a traditional holiday deal weekend,” explained Jessica Caldwell, director of industry analysis for Edmunds.com.
“In truth, incentives simply aren’t increasing at the rates suggested by the year-end advertising campaigns,” Caldwell added.
And the overall figures back up Caldwell’s assessment.
Edmunds.com estimated that the industry’s aggregate incentive spending was approximately $2.14 billion in November, an amount 7.4-percent lower than the previous month.
The site indicated Chrysler, Ford and General Motors spent $1.3 billion, or 59.3 percent of the total. Elsewhere Edmunds.com indicated that Japanese manufacturers spent $570 million, or 26.7 percent; European manufacturers spent $193 million, or 9percent; and Korean manufacturers invested $107 million, or 5 percent.
“Compared with November last year, GM cut its incentive spend by the largest percentage — 23 percent — of the Big 6 automakers,” Edmunds.com senior analyst Michelle Krebs shared in her analysis of November sales trends on AutoObserver.com.
“Toyota, still trying to dig itself out from the sales decline it experienced due to its many recalls this year, has increased incentives most of the Big 6 at 10 percent,” Krebs continued. “Honda, which rides Toyota’s coattails, also boosted its incentives by 10 percent on a year-to-year basis.”
Among vehicle segments, Edmunds.com found premium sport cars had the highest average incentives at $5,811 per vehicle sold, followed by premium luxury cars at $5,057.
The site reported subcompact cars had the lowest average incentives per vehicle sold at $1,272, followed by sport cars at $1,422.
Edmunds.com’s analysis of incentive expenditures as a percentage of average sticker price for each segment showed large cars averaged the highest at 13.2 percent. Large trucks came right behind at 10.3 percent. The site discovered sport cars averaged the lowest at 3.8 percent and luxury SUVs followed with 4.6 percent.
Comparing all brands in November, analysts determined smart spent the least at $519 per vehicle sold, followed by Subaru at $548. At the other end of the spectrum, they learned Mercury spent the most — $6,927 — with Cadillac averaging $5,340.
Relative to their vehicle prices, Edmunds.com believes Mercury and Saab spent the most at 23.2 percent and 12.6 percent of sticker price, respectively. The site added Porsche spent just 1.5 percent and Subaru spent 2.1 percent.
“Edmunds.com’s monthly True Cost of Incentives 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,” site officials explained.
“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,” they added.
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