Businessweek Archives

December Incentive Spending Down


Edmunds just released its estimates for December ‘06 incentive spending in the U.S. It’s an interesting batch of results that touches on some of the industry’s biggest issues over the last twelve months – heavy gas-guzzlers walk the plank, crisis in mini-vanland, some trouble and some fixes in Detroit.

Average spending for all manufacturers of $2,376 is up slightly from November 2006, just about 3%. But it’s down twice that much since December of the previous year. For the year, incentives averaged $2,469, down 2.6% from $2,536 in 2005.

Other highlights include:

—Chrysler, Ford, and GM spent an aggregate of $2.4 billion, i.e. 72% of the total spent

—Large trucks and SUVs had, duh, the highest incentives, between $3,886 and $3,937 per vehicle

—Drama for minivans: incentives shot up an average of $500 month-over-month and almost $1,000 year-over-year per vehicle thanks to languishing inventory

—Biggest percentage spending increase award goes to…Nissan, up 30.3% to $2,314

—Scion and Honda spent the least, $94 and $472 per vehicle respectively

—Jeep and Lincoln spent the most, $5,200 and $4,597 per vehicle respectively

And, perhaps most interestingly, of the big six, only General Motors cut spending – down 17.3% to $2,982 from $3,604 in 2005. Alas, that’s still nearly three times what Toyota spent during the same period.


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