April Sales: Incentives And Transaction Prices
So, sales are up… but what are the automakers spending in order to get those sales? And what are they getting for their cars? Step inside our incentives and transaction price tracking center for a look at the factors that play affect how sales turn into profits (or don’t). But first, take a look at the graph above showing US-market incentive spending broken out by the regions where automakers are based. As usual, the US-based OEMs put more cash on the hood than their competitors, but more importantly notice how much money is spent on sales each month: nearly $2.5b was spent last month. And despite being a serious chunk of change, Edmunds AutoObserver says that’s the lowest overall level of incentive spending since 2005. So if you’re inclined to ignore incentives when it comes to your monthly sales education, you might want to start paying some attention…
Here, via TrueCar, comes the important stuff: incentives as a percentage of transaction prices. Once again, GM and Chrysler are leading the pack in this dubious distinction, and GM appears to be adding incentives relative to both last month and April 2010, the only automaker trending upwards in both comparisons. But the strong declines year-over year across most of the rest of the industry are likely to only accelerate as the Japanese automakers deal with supply interruptions in the aftermath of the Japanese quake and tsunami. GM and Chrysler need to either start dialing back those incentives aggressively, or start showing strong market share gains as the competition takes cash of their dwindling number of hoods.
Bloomberg has reported that GM incentive spending had dropped from April to March, not increased. Why the difference between the two reports?
"But first, take a look at the graph above showing US-market incentive spending broken out by the regions where automakers are based." Technically, I think it is a distribution (pie) chart; a graph displays changes over time...
EN, Do you think it is fair to post 2 sources who have different data and then start saying GM and Chrysler are doing the wrong thing because one source says incentive spending is up, but the other source you use in this article says incentive spending is down for them? I don't know who you can is right in this case, Edmunds or TrueCar. How do you make the distinction of which on you think is correct?
Are they going to ramp up the incentives to move the Volts off the lots? http://www.cars.com/for-sale/searchresults.action?stkTyp=N&tracktype=newcc&mkId=20053&AmbMkId=20053&AmbMkNm=Chevrolet&AmbMdNm=Volt&mdId=35025&rd=100000&zc=67201&enableSeo=1&searchSource=TRAIL_HEAD