Online buyers guide Edmunds.com said on Monday that the average manufacturer incentive per vehicle sold in the United States was $US2,624 in June 2003, up $654 or 33.2% from June 2002 and up 3.6% or $92 from May 2003.
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Industry average “days-to-turn,” which measures how many days on average it takes to sell a vehicle after it hits the dealer’s lot, remained constant from last month at 69 days, but was up from last June’s 55 days.
Edmunds.com’s monthly True Cost of Incentives (TCISM) report takes into account all of the manufacturers’ various United States incentives programmes, including subvented interest rates and lease programmes as well as cash rebates to consumers and dealers. To assure the greatest possible accuracy, the company 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.
Incentives spending for domestic Chrysler, Ford and General Motors nameplates averaged a record high $3,516 per unit in incentives in June, compared to $1,898 for European car makers, $1,369 for Korean makers, and $1,030 for Japanese makers.
Chrysler had the biggest increase in incentives spending in June, up 14.2% to $3,494. Despite this jump in incentives, the US market share for Chrysler fell 0.3% to 13.5% in June. Ford increased incentives spending by 1% for the month, to $3,252 per unit, and saw its market share inch up 0.2% to 19.4%. General Motors increased its incentives spending 0.9 % for the month, to $3,708 per unit, while its market share increased 1.6% to 28.5% in June, its highest level since December 2002.
By vehicle segment, large SUVs had the highest average incentives in June at $3,829, followed by large cars at $3,478 and large trucks at $3,299. Luxury SUVs had the lowest average incentives at $1,270, with sports cars at $1,645 and compact SUVs at $1,716. Compact cars gained the most market share, up 0.7% to 15.5%, while midsize SUVs lost the most market share, down 0.5% to 12.7%.
“Because consumers are becoming less responsive to traditional incentives, many manufacturers are trying to break new ground by offering matching down payments, longer terms for low APR programmes, subsidised leases, 24-hour test drives and higher rebate amounts,” said Edmunds.com data analysis chief Jane Liu.
“However, there are certainly some exceptions where manufacturers with strong brands have produced highly desired vehicles; the new Toyota Sienna, Volkswagen Touareg and Lexus RX 330 are all having great sales success with virtually no incentives.”
