By on July 13, 2010

Edmunds has released its “true cost of incentive” index for June [via BusinessWire], and once again, GM took the top spot, followed by Chrysler and Ford. Detroit accounted for 61.3 percent of all incentive spending last month, with Trucks and Premium Sportscars attracting the highest incentives.Says Edmunds’ Michelle Krebs:

Last June incentives were sky-high, but sales were depressed, as buyers waited for details on the Cash for Clunkers program. If the industry was truly recovering, we would be blowing last June’s car sales numbers out of the water

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14 Comments on “GM Tops June Incentive Spending...”

  • avatar

    So Honda and Toyota lose some market share, but are (in theory) more profitable. Is that being stubborn? or good business? Or dangerous?

  • avatar

    Well considering we just found out that GM’s average transaction price is $31,627, average incentives of $3,808 isn’t unexpected when you compare to Ford ($30,218 & $3,117) & Toyota ($26,954 & $2,117). This means that on average GM gets $27,819 per vehicle sold, Ford – $27,101 and Toyota – $24,837.

    What Edmunds hasn’t told us yet is the third part of the equation – how much average profit per vehicle the manufacturers are making (ie. how much each vehicle cost to make).

    • 0 avatar

      The only flaw in that logic would be if the average transaction price included the incentives, which I would assume it would.

      But you are right in that the average profit per vehicle would be the real information worth having. If Ford makes more money selling an F-150 with a $3500 rebate than Toyota makes selling a Tundra with a $2000 rebate, the extra incentive that Ford offers doesn’t really hurt anything. As it is F-150s and Silverados have much higher resale value than Tundras, so the extra incentives aren’t hurting that either.

  • avatar

    Kudos to Chrysler for starting to show some financial discipline. Someone there apparently is acting as if it’s an actual going concern.

    • 0 avatar

      It is also interesting that Chrysler, with its ancient and largely unappealing product mix is spending significantly less in incentives than GM, which is supposed to have all of these world-class vehicles. Looks to me like Whitacre is trying to buy hisself some market share.

    • 0 avatar

      I would not throw a party for Chrysler. Their incentives spending is out of control also. Call us when Chrysler isn’t rental car lot dumping and spending double what Honda does to move retail.

    • 0 avatar

      Invisible, the ENTIRE industry is spending more on incentives than Honda. I don’t see your point. What I do see is that Chrysler is spending less proportionately than the other domestics. I also see that they have less recalls (both in number and in number of vehicles affected) than the domestics and most of the other major full line makers with significant market share in the US and Canada.

  • avatar

    Factor in that the D3 typically sell 30%+ to fleets – which I don’t think the discounts those customers get get factored into Edmunds TCI (retail only).

    Trucks cost a lot of money but are heavily purchased on the retail side – the majority of the fleet deals are with the small basic pickups and cars.

    Unfortunately difficult to analyze w/o all the proper information.

  • avatar

    Building a high quality, desirable car and selling it at an honest, up-front price is still the incentive I am looking for before buying a new car.

  • avatar

    I find it interesting that GM’s “true cost of incentive” for June 2010 is up 11.5% compared to June 2009. However, the only other company with such an increase is Toyota, which TCI increased by 63.1%

    But yeah, the thing that really matters is profit…

  • avatar

    So between the massive fleet dumping and offering the industries largest incentives, can we really believe the hype that GM is getting better?

  • avatar

    @GarbageMotorsCo. Reading eight of the nine previous comments ,from those that are both informed, and open minded. The answer would be, yes GM is getting better.

    You asked.

    • 0 avatar

      Loathe as I am to agree with mikey, he’s right. We don’t know how profitable Gov’t Motors is, because they’re not telling us.

      Though I’d think they’d be a bit more forthcoming with that information if the news was positive…

    • 0 avatar

      @Rob Finfrock,

      Did you miss GM’s quarterly statements they have been putting out? What part aren’t they telling us that others are? If I am missing something, please tell me because I would like to know.

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