Edmunds.com Reports True Cost of Incentives: Japanese Manufacturers Achieve Record Market Share as Industrywide, Incentives Level Off

SANTA MONICA, Calif., Feb. 2, 2005 -- Edmunds.com (http://www.edmunds.com/), the premier online resource for automotive information, reported today that the average manufacturer automotive incentive in the United States was $2,408 per vehicle sold in January 2005, up $43, or 1.8%, from January 2004, and down $104, or 4.2%, from December 2004.

Edmunds.com's monthly True Cost of Incentives(SM) (TCI(SM)) report takes into account all of the manufacturers' various United States 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.

Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates averaged $3,286 per vehicle sold in January, down $41 from December 2004. This is the fourth consecutive month that Chrysler and Ford have decreased incentives. Chrysler lowered incentives spending by $140 to $3,185 per vehicle sold in January, and gained 1.0% market share, capturing 14.0% of the U.S. market. Ford decreased incentives spending by $91 to $2,833 per vehicle sold in January, while its market share fell by 0.1% to 17.3%. General Motors decreased incentives spending in January by $141 to $3,648 per vehicle sold in January, while its market share dropped by 2.5% to 24.7%.

In January 2005, Korean automakers decreased incentives spending by $286 to an average of $1,567 per vehicle sold, the group's lowest level since November 2003. European automakers increased incentives spending by $35 to average $1,816 per vehicle sold and Japanese automakers increased incentives spending by $2 to average $1,078 per vehicle sold in January.

From December to January, Japanese manufacturers gained 1.3% and Korean manufacturers gained 0.3% market share while European manufacturers lost 0.9%, totaling 32.3%, 4.1% and 6.4%, respectively. This was a record high for the Japanese manufacturers. In the same period, domestic manufacturers lost market share, declining from 57.6% to 57.0%.

"Honda, Nissan and Toyota consistently gain market share when Chrysler, Ford and General Motors decrease their incentive spending," observed Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com.

Comparing all brands in January, Mini spent the least on incentives with $63, while Porsche spent only $77 and Scion spent $106 per vehicle sold. At the other end of the spectrum, Lincoln was the biggest spender at $5,224 in January, followed by Cadillac at $4,755 and Pontiac at $4,471 per vehicle sold. Looking at incentives expenditures as a percentage of MSRP for each brand, Pontiac spent the most, 18.2%, while Porsche spent the least, 0.1%.

Among vehicle segments, in January, large SUVs offered the highest average incentives, $4,169 per vehicle sold, while sports cars had the lowest average incentives per vehicle at $1,115. Looking at incentives expenditures as a percentage of MSRP for each segment, large cars were the highest, 12.0%, while sports cars were the lowest, 4.0%.

Midsize SUVs have lost the most market share since January 2004, decreasing from 13.8% to 12.0%, while large cars have gained the most market share during that period, up from 4.8% to 6.3% of the new vehicle market.

About Edmunds.com True Cost of Incentives(SM) (TCI(SM))

Edmunds.com's TCI(SM) is a comprehensive monthly report that measures automobile manufacturers' cost of incentives on vehicles sold in the United States. These costs are reported on a per vehicle basis for the industry as a whole, for each manufacturer, for each make sold by each manufacturer and for each model of each make. TCI covers all aspects of manufacturers' various incentives programs (except volume and similar bonus programs), including dealer cash, manufacturer rebates and consumer savings from subvented APR and lease programs (including subvented lease residual values used in manufacturer leasing programs). Data for the industry, the manufacturers and the makes are derived using weighted averages and are based on actual monthly sales and financing activity.

About Edmunds.com, Inc.

Edmunds.com is the premier online resource for automotive information. Its comprehensive set of data, tools and services, including Edmunds.com True Market Value(R) pricing, is generated by Edmunds.com Information Solutions and is licensed to third parties. For example, the company supplies content for the auto sections of NYTimes.com, AOL, About.com, iVillage,com and IGN.com, provides weekly data to Automotive News and delivers monthly data reports to Wall Street analysts. Edmunds.com was named "best car research" site by Forbes ASAP, has been selected by consumers as the "most useful Web site" according to every J.D. Power and Associates New Autoshopper.com Study(SM) and was ranked first in the Survey of Car-Shopping Web Sites as reported by The Wall Street Journal. The company is headquartered in Santa Monica, Calif. and maintains a satellite office outside Detroit.