Record Number of Models Surpass $10,000 in Incentives, Edmunds.com Analysis Shows
August 26, 2008
SANTA MONICA, Calif. -- As industry vehicles sales have sagged, it's well known that that
automakers' incentive spending has edged higher in their effort to move the metal. Now Edmunds.com's analysis of incentive spending shows a record number of models have reached the lofty level of $10,000 per vehicle in incentives.
A record 10 vehicles in July recorded a Total Cost of Incentive (TCI) of more than $10,000. (TCI is Edmunds.com's proprietary calculation of all incentives on a volume-weighted basis.) Two were BMW models; the rest were General Motors vehicles wearing Cadillac, Saab or Hummer nameplates.
A record two models - BMW's flagship 7-Series sedan and Saab's 9-7X SUV - have averaged a $10,000 plus incentive for the entire year so far. In fact, the 7-Series is approaching the $20,000 mark.
In order of the amount of incentive, the 10 models recording a TCI of more than $10,000 in July were: BMW 7-Series; Saab 9-7X; Cadillac XLR; Cadillac Escalade; Cadillac Escalade ESV; Cadillac Escalade EXT; Hummer H2SUT; BMW 6-Series; Cadillac STS; and Saab 9-5.
| 10 Models with More Than $10,000 in Incentives in July | ||||
|---|---|---|---|---|
| Make | Model | Volume | *MSRP | TCI |
| BMW | 7 Series | 1,006 | $76,800 | $18,704 |
| Saab | 9-7X | 405 | $40,935 | $14,559 |
| Cadillac | XLR | 73 | $80,690 | $14,130 |
| Cadillac | Escalade | 1,775 | $55,990 | $13,365 |
| Cadillac | Escalade ESV | 842 | $58,490 | $13,357 |
| Cadillac | Escalade EXT | 329 | $54,890 | $13,192 |
| HUMMER | H2 SUT | 80 | $57,470 | $11,588 |
| BMW | 6 Series | 485 | $76,600 | $10,723 |
| Cadillac | STS | 1,046 | $44,515 | $10,578 |
| Saab | 5-Sep | 227 | $37,685 | $10,162 |
* MSRPs are 2008 model year prices.
Source: Edmunds.com
By comparison, only one model averaged $10,000 in incentives throughout all of 2006 and 2007. None hit that milestone in the 2002 to 2005 timeframe.
At least three vehicles every month so far in 2008 have had a TCI of more than $10,000. May saw a half dozen models with a TCI of more than $10,000 a vehicle; March had four; and January, February, April and June had three models in that incentive territory.
By comparison, four vehicles hit the $10,000 mark in July of 2007, but, even in September 2004, the month with the highest industry TCI on record, not a single model had an incentive of more than $10,000.
In total, Edmunds.com's calculations shows July 2008 was the 10th highest month for incentive spending since it started calculating TCI in 2002.
Jessica Caldwell, director of pricing and industry analysis, provided the analysis for this report.
Photos by manufacturers
2008 BMW 7-Series
2009 Saab 9-7X
Posted by Michelle Krebs at 8:02 AM under Analysis , Companies , GM | Comments (1) | digg this | Seed Newsvine
It's a tough market. With everyday needs becoming so expensive, and folks finding themselves upside down on some vehicles as the tradein values plummeted, it's becoming hard to justify buying a new vehicle right now. In order to move anything, especially larger vehicles, something's gotta give.
Posted by: jerrywimer | August 28, 2008 at 8:39 AM