Toyota Offers Highest Incentives Ever in March, Edmunds.com Reports
By Michelle Krebs April 1, 2010Toyota, seeking to come back from recalls, quality issues and negitave publicity, set new heights for its incentives as it offered zero-percent financing and discounted leases throughout March, accourding to Edmunds.com's estimates.
The average automaker incentive in March was $2,742 per vehicle, up $100, or 3.8 percent, from February 2010, but down $423, or 13.4 percent, from March 2009.
Those hefty incentives offered by Toyota and other automakers who followed suit are expected to lift March car sales to their highest levels since last summer's Cash for Clunkers program, Edmunds.com Senior Analyst Jessica Caldwell predicted.
Toyota's incentives, to which some of its Japanese competitors responded, pushed the combined incentive spending of Japanese automakers to their highest ever. From February to March, Japanese automakers boosted their spend by $224 to $2,058 per vehicle sold.
Combined incentives spending for domestic manufacturers averaged $3,413 per vehicle sold in March 2010, down from $3,463 in February 2010. European automakers increased incentives spending by $151 to $2,763 per vehicle sold. Korean automakers increased incentives spending by $349 to $1,997 per vehicle sold.
In March, the industry's aggregate incentive spending is estimated to have totaled approximately $3.07 billion, up 49.4 percent from February 2010. Chrysler, Ford and General Motors spent an aggregate of $1.7 billion, or 54.8 percent of the total; Japanese manufacturers spent $922 million, or 30.5 percent; European manufacturers spent $262 million, or 8.7 percent; and Korean manufacturers spent $183 million, or 6.1 percent.
Among vehicle segments, large trucks had the highest average incentives, $4,290 per vehicle sold, followed by large SUV at $3,843. Subcompact cars had the lowest average incentives per vehicle sold, $1,294, followed by sport cars at $1,416. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 12.6 percent, followed by large cars at 11.9 percent of sticker price. Premium sport cars averaged the lowest with 2.7 percent and sport cars followed with 4.4 percent of sticker price.
Comparing all brands, Scion spent the least, $333 followed by Mini at $697 per vehicle sold. At the other end of the spectrum, Lincoln spent the most, $5,205, followed by BMW at $4,794 per vehicle sold. Relative to their vehicle prices, Saturn and Chrysler spent the most, 15.0 percent and 13.7 percent of sticker price, respectively; while Porsche spent 1.3 and Scion spent 1.9 percent.
"April is typically a slower sales month than March, and we're already getting signal that some automakers will extend their incentives," said Edmunds.com's Caldwell. "The question is will they be effective. The trend we saw in March was that incentives were very effective early in the month but far less so by month's end."
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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domestic incentives are always higher due to the high prices and high incentives associated with trucks. Based on sticker price the incentives offered by Nissan and Hyundai are probably larger.
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