If you are thinking of buying some stock of an automaker, now could be a good time. Not because of the strong sales. Because of dropping incentives, paired with strong sales. This indicates a strong first quarter, which should drive up stock prices.
February’s incentives came in at the lowest of any February since 2003, says the Edmunds.com’s True Cost of Incentives barometer. Edmunds.com reports that the average TCI per vehicle in February was $2,193, up 2.4 percent over January (MoM,) but down 14.5 percent from February of last year (YoY.) Says Edmunds.com Senior Analyst Jessica Caldwell:
“The decreased incentives spending across the industry so far in 2012 really underscores the healthy performance we’ve been seeing at dealerships nationwide. Car manufacturers know that consumers who deferred purchases in 2011 are still coming back to the market and by stepping back the discounts, they stand to pocket bigger profits. The first quarter of 2012 is shaping up quite well for automakers.”
|Average True Cost of Incentives®