Domestic Automakers’ Incentives Plummet
Domestic automakers spent 12% less on consumer incentives in June over the previous year indicating that the Big Three U.S. automakers (Chrysler, Ford and General Motors) have tightened the purse strings.
The three companies forked out a total of $2.9 billion during the month representing 73% of total incentive spending, compared to 83% last year, according to Edmunds.com, an online resource for automotive information.
“And their market share was about 10 points higher too,” said Dr. Jane Liu, VP-data analysis for Edmunds.com in a statement. “This reflects a 12% decrease in incentives spending and a 16% decrease in market share year-over-year.”
During June, the average automotive manufacturer incentive in the U.S. was $2,580 per vehicle, down $265, or 9% from the previous year.
On a whole, the industry spent an estimated $4 billion in June. Japanese manufacturers spent $684 million, or 17% of the total. European manufacturers spent $287 million and Korean manufacturers spent $136 million.
Santa Monica, CA-based Edmunds.com reported that combined, incentive spending for domestic manufacturers averaged $3,465 per vehicle sold during the month. Chrysler led the pack with $3,768 per vehicle sold. Ford forked out $3,647 per vehicle sold and GM spent $3,185 per vehicle sold.
Comparing all brands, Scion spent the least, $73, followed by Porsche at $478 per vehicle sold. At the other end of the spectrum, Jaguar spent the most at $6,762, followed by Cadillac at $6,055 per vehicle sold. Relative to their vehicle prices, Jeep and Saab spent the most, 17.2% and 16.8% of sticker price, respectively, while Scion and Porsche spent the least at 0.5% and 0.7%, respectively.
Among vehicle segments, large SUVs continued to have the highest average incentives, $4,605 per vehicle sold, followed by large trucks at $4,183. Sport cars had the lowest average incentives per vehicle sold, $743, followed by compact cars at $876.
“Fuel economy continues to play a major role in vehicle purchase choices,” Liu said. “The gas guzzlers need a lot of help moving off dealership lots.”
Of the Big Three, Chrysler has re-launched its employee pricing promotion for July. The promotion offers consumers the same price its employees pay for vehicles (PROMO Xtra, July 5, 2006).
