The average manufacturer automotive incentive in the United States was $US2,981 per vehicle sold in July 2005, up $96, or 3.3%, from July 2004, and up $136 or 4.8% from June 2005, according to Edmunds.com.
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The industry’s aggregate incentives spending totalled a record $5.3 billion in July. Domestic manufacturers spent $4.33 billion or 81% of the total cost, Japanese manufacturers spent $653 million or 12%, European manufacturers spent $245 million or 5%, and Korean manufacturers spent $137 million or 3%.
“Some automakers are now implementing a ‘value pricing’ strategy to help to reduce this excessive cost,” said Edmunds’ head analyst Jane Liu. “However, it may not work as well as they’d like, since many consumers are programmed to expect incentives and may not even notice that sticker prices have been lowered. Automakers in that situation may be forced to offer incentives that drop prices even further.”
Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates averaged $3,942 per vehicle sold in July, up $113 from June 2005. Chrysler decreased incentives spending $73 to $3,623 per vehicle sold in July. In the same period, Chrysler’s market share increased 0.2% to 13.3%. Ford increased incentives spending by $688 to $3,876 per vehicle sold in July while its market share increased 3% to 18.9%. General Motors decreased incentives spending by $56 to $4,135 per vehicle sold in July while its market share decreased 3.4% to 28.7%. The combined market share of the Big Three was 61.0% in July, down 0.2% from June.
From June to July, European automakers increased incentives spending by $447 to an average of $2,382 per vehicle sold; their market share slid 0.1% to 5.8%. Japanese automakers increased incentives spending by $189 to a record high average of $1,236 per vehicle sold; their market increased 1% to 29.3%. Korean automakers increased incentives spending by $99 to an average of $1,945 per vehicle sold; their market share decreased 0.3% to 3.9%.
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By GlobalDataComparing all brands in July, Mini spent only $28 while Scion spent $102 and Porsche spent $157 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $6,442, followed by Saab at $5523 and Jaguar at $5,097 per vehicle sold. Looking at incentives expenditures as a percentage of MSRP for each brand, Saab and Pontiac spent the most, 17.8% and 15.0%, respectively, while Mini and Porsche spent the least, 0.1% and 0.2%, respectively.
Among vehicle segments, large SUVs continued to offer the highest average incentives, $5,164 per vehicle sold, while sports cars had the lowest average incentives per vehicle at $995. Looking at incentives expenditures as a percentage of MSRP for each segment, large trucks were the highest, 12.5%, while sports cars were the lowest, 3.4%.
Midsize cars have lost the most market share since July 2004, decreasing from 15.2% to 12.4%, while large trucks have gained the most market share during that period, up from 14.9% to 18.6% of the new vehicle market.
July sales pace as hot as the weather
