December Incentives Report: Detroit Dominates, But Imports Are Catching Up

Edward Niedermeyer
by Edward Niedermeyer
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december incentives report detroit dominates but imports are catching up

As we wade through our year-end sales number reports, one of the important metrics that we’ll be looking at are incentive spending rates. Detroit continues to dominate both Edmunds’ True Cost of Incentives index (above) and TrueCar’s incentive forecast (after the jump), with little serious competition for their supremacy in this profit-sapping and brand equity-squandering category. Still, the foreign firms are increasing their incentives while Detroit has generally scaled back over the last year, so the incentive race is slowly getting tighter…

TrueCar’s incentive forecast (above) shows that Nissan in particular is approaching Detroit-like levels of cash on the hood, although discrepancies with the Edmunds numbers, particularly in regards to Nissan (the most-incentivized import) and Ford (the least-incentivized domestic), do muddy the picture a bit. And since only Emdunds offers year-end incentive numbers (below), that’s all we have to go on for a picture of the industry’s incentive activity in 2010. And those numbers definitely do show a narrowing of the gap between foreign and domestic automakers, with Detroit cutting back on incentives and the foreign firms increasing their spends. Still, until the Detroit firms breaks free of the $3k-per-vehicle level, it will be tough to heap too much praise on their restraint… and until the imports top $3k-per-vehicle, it won’t be much of a horse race.

Edward Niedermeyer
Edward Niedermeyer

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  • Dimwit Dimwit on Jan 04, 2011

    A closer look might be required than just the average figures. It all comes out by model. $5k on a Flex but >$500 on F150's makes a large difference. Ford could keep that up indefinitely. It would be interesting to know how broad a range the incentives cover. Just a general interest rebate? Cash on the hood over the complete model range? Yadda, yadda, yadda.

    • CJinSD CJinSD on Jan 04, 2011

      The average is determined by the total expenditure on incentives divided by the total number of vehicles sold, not the sum of the prices of each model line's incentives divided by the number of model lines. I remember when $500 cash back was a big deal, and the average transaction price has less than doubled since then. Ford may be able to keep up $3K a car incentives indefinitely, which is what a P/L statement will reveal. The problem is that incentives tend to erode brand equity.

  • Steven02 Steven02 on Jan 05, 2011

    Do any of the incentive reports include price of the vehicle in their reports? The Detroit 3 sell more trucks. Trucks are more expensive and have bigger incentives. So do crossovers. Imports typically sell more cars, which are typically lower priced and have lower incentives (Camry best selling car again, has been for several years now). If the average price of a truck is 30k, and the average price of a car is 20k, (picking numbers randomly don't have actual data on it), then D3 having a 3k incentive is just as bad as a 2k incentive from the imports when it comes to incentives. I know the above example doesn't include the fact that all auto manufactures sell a mixed fleet of vehicles, but I really do think that incentives should be tracked as a function of MSRP as opposed to a price per unit.

  • Marky S. I own the same C.C. XSE Hybrid AWD as in this article, but in Barcelona Red with the black roof. I love my car for its size, packaging, and the fact that it offers both AWD and Hybrid technology together. Visibility is impressive, as is its small turning circle. I consider the C.C. more of a "station wagon" by proportion, rather than an “SUV.” It is fun to drive, with zippy response and perky pick-up. It is a pleasant car to drive and ride in. It is not trying to be a “Butch Off-Roader”, or a cosseting “Luxury Cruiser.” Those are not its goals or purpose. The Corolla Cross XSE Hybrid AWD is a wonderful All-Purpose Car (O.K. – “SUV” if you must hear me say it!) with a combination of all the features it has at a reasonable price.
  • Ernesto Perez There's a line in the movie Armageddon where Bruce Willis says " is this the best idea NASA came up with?". Don't quote me. I'm asking is this the best idea NY came up with? What's next? Charging pedestrians to walk in certain parts of the city? Every year the price for everything gets more expensive and most of the services we pay for gets worse. Obviously more money is not the solution. What we need are better ideas, strategies and inventions. You want to charge drivers in the city - then put tolls on the free bridges like the Brooklyn, Manhattan and Williamsburg bridges. There's always a better way or product. It's just the idiots on top think they know best.
  • Carsofchaos The bike lanes aren't even close to carrying "more than the car lanes replaced". You clearly don't drive in Midtown Manhattan on a daily like I do.
  • Carsofchaos The problem with congestion, dear friends, is not the cars per se. I drive into the city daily and the problem is this:Your average street in the area used to be 4 lanes. Now it is a bus lane, a bike lane (now you're down to two lanes), then you have delivery trucks double parking, along with the Uber and Lyft drivers also double parking. So your 4 lane avenue is now a 1.5 lane avenue. Do you now see the problem? Congestion pricing will fix none of these things....what it WILL do is fund persion plans.
  • FreedMike Many F150s I encounter are autonomously driven...and by that I mean they're driving themselves because the dips**ts at the wheel are paying attention to everything else but the road.