Low incentives spending suggests big first quarter for automakers
(March 7, 2012) SANTA MONICA, Calif. — February's incentives spending on new car sales increased month-over-month but still came in at the lowest of any February since 2003, according to an analysis of Edmunds.com's True Cost of Incentives (TCISM). Edmunds.com reports that the average TCISM per vehicle in February was $2,193, up 2.4 percent over January, but down 14.5 percent from February of last year.
"The decreased incentives spending across the industry so far in 2012 really underscores the healthy performance we've been seeing at dealerships nationwide," says Edmunds.com Senior Analyst Jessica Caldwell.
"Car manufacturers know that consumers who deferred purchases in 2011 are still coming back to the market and by stepping back the discounts, they stand to pocket bigger profits. The first quarter of 2012 is shaping up quite well for automakers."
Average True Cost of Incentives (TCI) by Car Manufacturer
| Manufacturer | 12-Feb | 12-Jan | 11-Feb | Feb 2012 vs. Jan 2012 | Feb 2012 vs Feb 2011 |
|---|---|---|---|---|---|
| Chrysler | $2,426 | $2,447 | $3,191 | -0.9% | -24.0% |
| Ford | $2,827 | $2,788 | $2,778 | 1.4% | 1.8% |
| GM | $3,257 | $3,171 | $3,845 | 2.7% | -15.3% |
| Honda | $1,080 | $1,060 | $1,504 | 1.9% | -28.2% |
| Nissan | $2,717 | $2,417 | $2,797 | 12.4% | -2.9% |
| Toyota | $1,431 | $1,426 | $2,112 | 0.4% | -32.2% |
| Industry | $2,193 | $2,141 | $2,566 | 2.4% | -14.5% |
Of the top six automakers, only Ford increased its incentives spending year over year in February. Ford's incentives spend climbed 1.8 percent in February to $2,827. Toyota, meanwhile, boasted the biggest year-over-year drop in spending, cutting incentives by nearly one-third to $1,431 per vehicle.
Car buyers looking for the best bargains in February would have been wise to check out the deals from Lincoln and Chevrolet. These two automotive brands offered the biggest discounts off their average MSRPs last month, at 11.0 percent and 10.6, respectively. Shoppers can always find the vehicles with the most compelling deals on Edmunds.com's True Market Value Deals of the Month page. .
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.
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