Edmunds.com Reports True Cost of Incentivessm: Automaker Spending Influenced by Highest Leasing Level in Years

SANTA MONICA, Calif.--(BUSINESS WIRE)--Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,558 per vehicle sold in February 2011, essentially flat compared to January 2011, and down $99 – or 3.7 percent – from February 2010.

“Leases made up an estimated 25.2 percent of new car transactions in February, making it the highest single month for lease penetration since November 2005 when almost one out of every three new car sales was a lease.”

"This month’s incentives demonstrate the industry’s renewed emphasis on leases," said Jessica Caldwell, director of industry analysis for Edmunds.com. "Leases made up an estimated 25.2 percent of new car transactions in February, making it the highest single month for lease penetration since November 2005 when almost one out of every three new car sales was a lease.”

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,351 per vehicle sold in February 2011, down from $3,431 in January 2011. From January 2011 to February 2011, European automakers decreased incentives spending by $324 to $1,777 per vehicle sold; Japanese automakers increased incentives spending by $103 to $1,974 per vehicle sold; and Korean automakers increased incentives spending by $92 to $1,452 per vehicle sold.

True Cost of Incentives for the Top Six Automakers
Automaker	February 2011	January 2011	February 2010
Chrysler Group (Chrysler, Dodge, Jeep)	$3,124	$3,411	$3,644
Ford (Ford, Lincoln, Mercury)	$2,837	$2,855	$3,320
General Motors (Buick, Cadillac, Chevrolet, GMC)	$3,849	$3,828	$3,518
Honda (Acura, Honda)	$1,468	$1,544	$1,420
Nissan (Infiniti, Nissan)	$2,734	$2,329	$2,470
Toyota (Lexus, Scion, Toyota)	$2,041	$1,942	$1,904
Industry Average	$2,558	$2,561	$2,657

In February 2011, the industry's aggregate incentive spending is estimated to have totaled approximately $2.4 billion, up 14.6 percent from January 2011. Chrysler, Ford and General Motors spent an aggregate of $1.5 billion, or 60.6 percent of the total; Japanese manufacturers spent $703 million, or 29.4 percent; European manufacturers spent $138 million, or 5.8 percent; and Korean manufacturers spent $101 million, or 4.2 percent.

"General Motors and Nissan are showing the biggest year-over-year boosts in incentives among the top six automakers," added Caldwell. “It isn’t any coincidence that Edmunds.com also reports that both companies saw their highest single-month lease penetrations in at least the last decade.”

Subaru spent the least ($542 per vehicle sold) of all car brands in February, followed by Porsche at $632 per vehicle sold. At the other end of the spectrum, Saab spent the most at $7,349, trailed by Cadillac at $6,242 per vehicle sold. Relative to their vehicle prices, Saab and Mercury spent the most – 17.9 percent and 16.1 percent of sticker price, respectively – while Porsche spent 0.7 and Audi spent 2.0 percent.

Among vehicle segments, large cars had the highest average incentives at $5,046 per vehicle sold, followed by large trucks at $3,697. Subcompact cars had the lowest average incentives per vehicle sold, $1,237 followed by compact SUVs at $1,679. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 16.0 percent, followed by midsize cars at 10.1 percent of sticker price. Premium sport cars averaged the lowest with 2.2 percent and premium luxury cars followed with 2.5 percent of sticker price.

Edmunds.com's monthly True Cost of Incentives^SM (TCI^SM) 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.

About Edmunds.com, Inc. (http://www.edmunds.com/help/about/index.html)

Edmunds.com Inc. publishes Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.