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As Incentives Fall, So Does Domestic Share of Auto Market"
SANTA MONICA, Calif. -- Decreasing incentives cost U.S. automakers their lowest share ever of the global car market last month, according to a newly released analysis.Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates was $3,663 per unit in October, down $616 from September, an online resource for automotive information, Edmunds.com, reported Thursday. Chrysler lowered incentives spending in October by $133 to $3,644 per vehicle and gained 1.0% market share, achieving 12.8% in total, the report found. Ford decreased incentives spending by $637 to $3,410 per vehicle, and gained 0.3% market share, achieving 18.4%. GM had the most dramatic drop in incentives spending in October, down by $735 to $3,858 per vehicle. GM experienced a steep 6.0% decrease of its U.S. market share, falling to 25.3%, which is its lowest point since September 2002.As a result of GM's decrease, total U.S. market share for domestic nameplates fell to 56.5%, the lowest in recorded history.Edmunds.com also reported Thursday that the average manufacturer incentive per vehicle sold in the United States was $2,655 per vehicle sold in October, up $134, or 5.3%, from October 2003, and down $491, or 15.6%, from September. Edmunds.com's monthly True Cost of Incentives report takes into account all of the manufacturers' various U.S. incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.In October, Korean automakers reduced incentives spending by $22 to average $2,185 per vehicle while European automakers reduced incentives spending by $167 to average $2,330 per vehicle sold. Japanese automakers spent $929 per vehicle sold in August, up slightly from $911 the prior month."Most manufacturers did not have to rely on incentives as heavily this month since they were selling more 2005 model year vehicles," said Jane Liu, vice president of data analysis for Edmunds.com. "Also, consumers realize that 2005 models will hold their value longer than their 2004 counterparts, and are willing to pay more for them."Of all brands, Mini spent the least on incentives, $12 per vehicle sold, while Scion spent only $73 and Lexus spent just $167. At the other end of the spectrum, Lincoln was the biggest spender in October at $4823 per vehicle sold, followed by Saab at $4,566 and Jaguar at $4,345.Among vehicle segments, large SUVs continued to offer the highest average incentives, $4,680 per vehicle sold. Other segments with high incentives were large trucks at $3,373 and large cars at $3,258. Compact cars had the lowest average incentives at $1,449 per vehicle sold, followed by luxury sports cars at $1,880 and luxury SUVs at $1,933."In most cases, vehicles with high sticker prices tend to have correspondingly high incentives, but the luxury sports car and luxury SUV segments are selling without much money on the hood," Liu observed. "Products in those segments are very desirable right now, even as fuel prices fluctuate."Midsize cars have lost the most market share since October 2003, decreasing from 16.6% to 15.6%, while large cars have gained the most market share during that period, up from 4.2% to 5.8% of the U.S. new vehicle market.Visit Edmunds.com at www.edmunds.com"