Impact: Incentives hit a low as car prices rise image

Edmunds reports that the average transaction price for light vehicles in the United States was $29,583 in April 2011, up $229 (0.8 percent) from April 2010 and up$305 (1.0 percent) from March 2011.
Almost every major carmaker has raised sticker prices in the past few months to cover higher commodity costs (which still are rising)

The average True Cost of IncentivesSM (TCISM) from automotive manufacturers in the U.S. was $2,118 per new car sold in April 2011, down $250, or 10.6 percent, from March 2011, and down $515, or 19.6 percent, from April 2010. The figure stands as the lowest incentive spending by the auto industry since reported an average spending of $1,962 in October 2005.

“Manufacturers and dealers will benefit greatly from higher transaction prices and lower incentives due to higher customer demand and temporarily low vehicle inventory levels,” continued Toprak. “But earnings could be negatively affected due to supply constraints over the summer months and beyond.”

A new commentary by CEO Jeremy Anwyl reveals that consumer interest already started to fade throughout the month of April. The seasonally adjusted annual rate (SAAR) of car sales was as high as 14.7 million units in the first few days of the month. By the last week of April, the SAAR had fallen to 13 million.

True Cost of Incentives for the Top Six Automakers
Automaker April 2011 March 2011 April 2010
Chrysler Group (Chrysler, Dodge, Fiat, Jeep) $2,455 $2,882 $3,338
Ford (Ford, Lincoln) $2,421 $3,012 $3,232
General Motors (Buick, Cadillac, Chevrolet,
$3,016 $3,259 $3,301
Honda (Acura, Honda) $1,715 $1,765 $1,779
Nissan (Infiniti, Nissan) $1,886 $2,367 $2,474
Toyota (Lexus, Scion, Toyota) $1,687 $1,968 $2,329
Industry Average $2,118 $2,368 $2,633