By on March 1, 2012

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®
Manufacturer 12-Feb 12-Jan 11-Feb MoM YoY
Chrysler $2,426 $2,447 $3,191 -0.90% -24.00%
Ford $2,827 $2,788 $2,778 1.40% 1.80%
GM $3,257 $3,171 $3,845 2.70% -15.30%
Honda $1,080 $1,060 $1,504 1.90% -28.20%
Nissan $2,717 $2,417 $2,797 12.40% -2.90%
Toyota $1,431 $1,426 $2,112 0.40% -32.20%
Industry $2,193 $2,141 $2,566 2.40% -14.50%

 

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3 Comments on “Call Your Broker: Edmunds Predicts Strong Quarter For Automakers...”


  • avatar
    tallnikita

    Buy their stocks – riiiight, because the institutional speculators haven’t done what they had to do already to the stock prices.

  • avatar
    CJinSD

    And once everyone buys on the news, the stocks will be driven down by a brief furor over the impact of oil prices on vehicle sales. Then they’ll raise on stories about efficient car sales being strong. Then they’ll fall when the news is dominated by dark clouds over the western economies. Fun with people who wake up every day like blank slates!

  • avatar
    Halftruth

    Calling my broker right now.. dont buy!!!

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