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Edmunds Reports True Cost of Incentives for February 2007


March 2007
 Filed under: AUTOMOTIVE INDUSTRY TRENDS Car News | AUTOMOTIVE INDUSTRY TRENDS Headlines
SANTA MONICA, Calif. — March 1, 2007 — Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,253 per vehicle sold in February 2007, down $33, or one percent, from January 2007, and down $95, or four percent, from February 2006.

Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all manufacturers' 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.
"The industry's incentives spend is relatively flat this month," stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "Most automakers are following a strategy of steadily decreasing their overall incentives spending, but others are increasing their offers to get the competitive edge at the point of sale."

In February, the industry's aggregate incentive spending is estimated to have totaled approximately $2.7 billion, up from $2.5 billion in January. Chrysler, Ford and General Motors spent an aggregate of $1.9 billion, or 70 percent of the total; Japanese manufacturers spent $530 million, or 19 percent; European manufacturers spent $193 million, or seven percent; and Korean manufacturers spent $107 million, or four percent.

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,035 per vehicle sold in February, down from $3,113 in January 2007. From January to February, European automakers decreased incentives spending by $154 to $2,373 per vehicle sold; Japanese automakers decreased incentives spending by $10 to $1,187 per vehicle sold; and Korean automakers increased incentives spending by $146 to $1,956 per vehicle sold.

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