Car buyers’ website Edmunds.com said that the average manufacturer incentive per vehicle sold in the United States was $US2,135 in February 2003, up 10% from $1,939 in January 2003. Even more dramatic was the year-over year comparison, as incentives were up 41.3% from February 2002 to February 2003.

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The data takes into account all manufacturers’ various incentives programs, including subvented interest rates and lease programmes as well as cash rebates to consumers and dealers.


Minivans offered the most significant increase in incentives per unit, jumping 18.2% to $2,739.  The large light truck segment had the second highest increase, climbing 14% to $2,464 per unit in February.


European manufacturers expanded their incentives 27% from $1,120 in January to $1,422 in February. Despite incurring this expense, the total market share of the European manufacturers remained basically unchanged during the period.


Chrysler, Ford and General Motors incentives increased an average of 5% overall from $2,749 in January to $2,886 in February. Of those, Chrysler’s increase was the largest at 10% or $245 per vehicle; Chrysler enjoyed a market share increase of 2.1% during the period.

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An analysis of the incentives spending by the origin of manufacturers demonstrated that for every dollar the Japanese manufacturers spent on every vehicle they sold in February 2003, Korean manufacturers spent $1.15, Europeans spent $1.67, and domestics spent $3.39.


“Looking individually at manufacturer’s motivation to offer incentives, it seems some are pressured to subsidise older models and others that are not currently in high demand,” said Edmunds.com executive director of data analysis Jane Liu. “Other manufacturers seem driven by desire to increase market share at almost any cost.”