2011 model year inventory running out — 'Days to Turn' rate lowest on record

(November 1, 2011) SANTA MONICA, Calif. — Edmunds.com noted today that October may officially be the turning point for the automotive model year.

In October, 2012 model year vehicles made up 52.3 percent of new car sales; in September the figure was only 35 percent. Chrysler and Honda were among the brands that practically doubled their 2012 sales penetration from September levels, while Toyota more than tripled its 2012 share this month.

As a result, average industry incentive spending decreased in October, since the newer model year vehicles are hardly discounted compared to the 2011 models.

On average, automakers spent an average of $2,158 on vehicle incentives per vehicle sold in October, said Edmunds.com, down 12.1 percent from September and down 11.5 percent from October 2010.

Edmunds.com analysts determined that 2011 model year incentives are essentially flat from September, while 2012 model year incentives climbed a slight five percent.

Average True Cost of Incentives (TCI) by Car Manufacturer

Manufacturer Oct-11 Sep-11 Oct-10 Oct 2011 vs. Sep 2011 Oct 2011 vs. Oct 2010
Chrysler $2,651 $2,891 $2,880 -8.3% -8.0%
Ford $2,728 $2,879 $3,135 -5.2% -13.0%
GM $3,024 $3,312 $3,215 -8.7% -5.9%
Honda $1,260 $1,791 $1,402 -29.6% -10.1%
Nissan $2,355 $2,494 $2,213 -5.6% 6.4%
Toyota $1,602 $2,019 $2,066 -20.7% -22.5%
Industry $2,158 $2,456 $2,439 -12.1% -11.5%

"The 'days to turn' rate, which counts the days a car is on the dealership lot before it is sold, is at the lowest point we have on record," said Jessica Caldwell, senior analyst at Edmunds.com. "Production is a lot leaner for the domestics these days, while Honda and Toyota are still rebuilding inventory after the earthquake."

Average Days to Turn by Car Manufacturer

Manufacturer Oct-11 Sep-11 Oct-10
Chrysler 83 80 61
Ford 46 49 45
GM 58 58 47
Honda 27 34 49
Nissan 50 48 59
Toyota 33 38 51
Industry 48 50 50

Edmunds.com's monthly True Cost of Incentives 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.