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Edmunds.com Reports True Cost of Incentives for August

SANTA MONICA, Calif.-(Business Wire)-September 3, 2008 - Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,642 per vehicle sold in August 2008, down $3, or 0.1 percent, from July 2008, but up $173, or 7.0 percent, from August 2007.

"Contrary to what you would expect, General Motors’ Employee Discount for Everyone program did not inflate GM’s incentive spending for the month of August,” stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "In fact, because the program required dealers to participate and subsidize part of the offer, the result was a net decrease in GM’s overall incentive costs.”

Edmunds.com's monthly True Cost of Incentives^SM (TCI^SM) 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.

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,832 per vehicle sold in August 2008, up from $3,762 in July 2008. From July 2008 to August 2008, European automakers decreased incentives spending by $811 to $2,578 per vehicle sold; Japanese automakers decreased incentives spending by $9 to $1,492 per vehicle sold; and Korean automakers decreased incentives spending by $53 to $2,079 per vehicle sold.

True Cost of Incentives for the "Big Six" Automakers
Automaker	August 2008	July 2008	August 2007
Chrysler Group	$4,366	$4,022	$3,769
Ford	$3,443	$3,202	$3,139
General Motors	$3,865	$4,063	$3,329
Honda	$1,205	$1,279	$1,102
Nissan	$2,312	$2,445	$2,304
Toyota	$1,398	$1,243	$887

In August 2008, the industry's aggregate incentive spending is estimated to have totaled approximately $3.32 billion, up 10.7 percent from July 2008. Chrysler, Ford and General Motors spent an aggregate of $2.1 billion, or 64.4 percent of the total; Japanese manufacturers spent $792 million, or 23.7 percent; European manufacturers spent $250 million, or 7.5 percent; and Korean manufacturers spent $146 million, or 4.4 percent.

"Overall incentive levels rose from last year,” commented Edmunds' AutoObserver.com Senior Editor Michelle Krebs. “Automakers are desperately trying to get rid of 2008 inventory in a weak economy as new model inventory arrives on dealer lots.”

Among vehicle segments, premium luxury cars had the highest average incentives, $7,198 per vehicle sold, followed by large SUVs at $6,211. Subcompact cars had the lowest average incentives per vehicle sold, $531, followed by compact cars at $961. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 17.2 percent, followed by large SUVs at 16.2 percent of sticker price. Subcompact cars averaged the lowest, 3.4 percent, followed by premium sport cars at 4.8 percent of sticker price.

Comparing all brands, in August MINI spent $80 followed by Scion at $131 per vehicle sold. At the other end of the spectrum, HUMMER spent the most, $8,861, followed by Cadillac at $7,006 per vehicle sold. Relative to their vehicle prices, HUMMER and Chrysler spent the most, 22.6 percent and 17.6 percent of sticker price, respectively; while MINI spent just 0.4 and Scion spent 0.8 percent.

About Edmunds Inc. (http://www.edmunds.com/help/about/)

Edmunds Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value^®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.

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