November Sales: Unraveling The Incentives

Edward Niedermeyer
by Edward Niedermeyer

This, according to TrueCar.com, is what automakers spent on incentives last month. Though Chrysler and GM have cut compared to November of last year, their incentive spending is on the march compared to last month, and they still vie for industry “leadership” in these profit-sapping spiffs. But that’s just TrueCar’s perspective…

Edmunds paints a slightly different picture with its True Cost of Incentives index for last month. Both GM and Chrysler are showing the same long-term progress and short-term regression, but Ford’s number is significantly higher than TrueCar’s calculation. Edmunds also calculates a significantly lower industry average, making Detroit’s indulgence seem all the more excessive. So which outfit has the right numbers? It’s hard to say, as incentives are often regional and are in constant flux. One other metric, provided only by TrueCar does cast a little more light on the situation, however.

GM and Ford lead the industry, likely fueled by high-margin, high-volume truck sales, but over the last year, Honda and Toyota are seeing the worst transaction price erosions among the major US-market players. Chrysler’s transaction prices have roared back in the last year (though, in fairness, they had nowhere to go but up), but GM’s 12-month improvement still pales compared to Hyundai’s one-percent gain. But, if there’s just one automaker who looks likely to slide towards low-price volume slinging, it’s Toyota. Having introduced big incentives to combat recall-related PR problems, Toyota’s sales are basically flat year-to-date (and fell last month), and their transaction price is down a whopping two percent on the year. That’s not a great sign for any automaker.

Edward Niedermeyer
Edward Niedermeyer

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  • GarbageMotorsCo. GarbageMotorsCo. on Dec 02, 2010

    So GM is still the leader of something: Incentives. Good for them.

  • Steven Lang Steven Lang on Dec 02, 2010

    I have to say that 'value pricing' does not work for most folks.

    Hundreds of dealers have tried going down this road to no sustainable success. Ford even tried to make the Denver market abide by this sales strategy during the late 1990's and sales went down dramatically.

    Most consumers like 'the deal' when it comes to new car purchases. They don't like the runaround. But they want to feel like they got that edge. It's human nature.

  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
  • JTiberius1701 Middle of April here in NE Ohio. And that can still be shaky. Also on my Fiesta ST, I use Michelin Pilot Sport A/S tires for the winter and Bridgestone Potenza for my summer tires. No issues at all.
  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
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