Despite Toyota-Fighting Promotions, January Incentives Dip, Edmunds.com Reports
By Michelle Krebs February 2, 2010Incentives paid by manufacturers in January dipped below year-ago and December levels despite last-minute promotions by Toyota's competitors to capitalize on the automaker's recall woes.
The average incentive was $2,382 per vehicle sold in January 2010, down $160, or 6.3 percent, from December 2009, and down $326, or 12.0 percent, from January 2009, Edmunds.com estimates.
"January incentives were not particularly generous or compelling - until some automakers began trying to conquest unsettled Toyota owners and shoppers late in the month," stated Jessica Caldwell, director of Industry Analysis for Edmunds.com. "January sales numbers are up from a year ago largely because of fleet sales."
Indeed, compared with December's deluge of deals, January looked like a relative drought in terms of incentives. And that will be obvious as automakers report sales Tuesday.
U.S. vehicle sales are expected to climb above year-ago levels, but largely due to big orders from corporate fleet operators and daily rental car companies. Retail demand, as predicted is likely to be lower than a year ago.
February will be far more interesting. The industry will launch the usual President's Day promotions. In addition, Toyota could announce some marketing measure to lure weary shoppers back to its showrooms after its recalls and sales stoppages in late January.
Toyota competitors won't stand still for that. As they demonstrated in January, they'll do what they can to capitalize on Toyota's weakened state.
Incentives by Region of Origin
By region of origin, Edmunds.com estimates for January:
- domestic manufacturers average incentive in January averaged $3,108 per vehicle, down from $3,399 in December 2009;
- European automakers' average incentives were $2,611, down $363 from December;
- Japanese automakers averaged $1,563 per vehicle, on par with December ;
- Korean automakers spent an avereage $2,096, up $69 from December.
By Category
Among vehicle segments, large trucks had the highest average incentives at $3,743 per vehicle sold, followed by large SUV at $3,724.
Subcompact cars had the lowest average incentives per vehicle sold, $1,116, followed by sport cars at $1,250.
Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 11.0 percent, followed by large cars at 9.6 percent of sticker price.
Premium sport cars averaged the lowest with 3.2 percent and premium luxury cars followed with 3.7 percent of sticker price.
By Brand
Comparing all brands, in January ini spent the least, $226 followed by Scion at $320 per vehicle sold.
At the other end of the spectrum, Hummer spent the most, $5,733, followed by Lincoln at $5,484 per vehicle sold. Relative to their vehicle prices, Saturn and Hummer spent the most, 18.4 percent and 15.2 percent of sticker price, respectively; while Mini spent 1.0 and Scion spent 1.9 percent.
Report Information
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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