Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

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Thread: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

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    Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Guess Who's Cutting Deals

    Here's your auto biz quiz: Which carmaker spent the most money per vehicle in October on customer incentives? If you said Ford (F ) or General Motors, (GM ) you're wrong. If you think it's Chrysler (DCX ), you're close, but wrong again. Believe it or not, it's BMW. The company started to spend more on incentives over the summer, but it really sweetened the deals in October. According to auto site Edmunds.com, givebacks cost BMW an average $4,179 per car during October, more than Chrysler's $4,136 a vehicle and more than twice what German rivals Audi and Mercedes-Benz (DCX ) are spending on incentives.

    It's not a matter of cash on the hood. When BMW cuts deals, it subsidizes leases, which make up at least 60% of its U.S. sales. The carmaker is offering almost $10,000 in lease subsidies for its flagship 7 Series sedan, Edmunds says, and $6,500 worth of lease support on an X5. Even the 5 Series, with sales up 5% this year, has almost $5,700 in lease subsidies.

    Frank Ursomarso, who owns a BMW dealership in Wilmington, Del., says you can drive a new 530i sedan for $489 a month--not much more than what you'd pay to get in the smaller Audi A4. The company says there are good reasons for the deals: a soft car market and the fact that the X5 will be replaced soon. (BMW wants to shed inventory of the old model.) But that explanation doesn't hold for the 7 Series and 5 Series, the current generations of which are less than three years old.

    The deals might not last. Executives get their bonuses in December, and Bimmers tend to fly off the lot. So now may be the time to hit the showroom.
    http://www.businessweek.com/@@xGc3ZG...9/c4012012.htm

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?!

    SANTA MONICA, Calif.--Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,257 per vehicle sold in October 2006, down $431, or 16 percent, from September 2006, but up $245, or 12 percent, from October 2005.

    Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all 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.

    The industry's aggregate incentives spending are estimated to have totaled approximately $2.8 billion in October, down from $3.6 billion in September. Chrysler, Ford and General Motors (GM) spent an aggregate of $2 billion, or 72 percent of the total; Japanese manufacturers spent $484 million, or 17 percent; European manufacturers spent $208 million, or eight percent; and Korean manufacturers spent $89 million, or three percent.

    According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,129 per vehicle sold in October, down from $3,687 in September 2006. Compared with last month, Chrysler's incentives spending was up $3 to $4,214 per vehicle sold; Ford's incentives spending was down $845 to $3,278 per vehicle sold; and General Motors decreased its incentives by $676 to $2,497 per vehicle sold.

    "Chrysler is offering generous incentives to move the 2006 inventory off their lots, while Ford and GM continue to reduce incentives and make the most of value pricing," remarked Dr. Jane Liu, Vice President of Data Analysis for Edmunds.com.

    From September to October, European automakers decreased incentives spending by $147 to $2,419 per vehicle sold; Japanese automakers decreased incentives spending by $300 to $1,074 per vehicle sold; and Korean automakers decreased incentives spending by $105 to $1,715 per vehicle sold.

    Comparing all brands, in October Scion spent the least, $66, followed by Honda at $285 per vehicle sold. At the other end of the spectrum, Jeep spent the most, $5,763, followed by BMW at $4,285 per vehicle sold. Relative to their vehicle prices, Jeep and Dodge spent the most, 20.7 percent and 13.7 percent of sticker price, respectively, while Scion and Porsche spent the least at 0.4 percent and 0.8 percent, respectively.


    Among vehicle segments, large SUVs had the highest average incentives, $4,800 per vehicle sold, followed by large trucks at $4,564. Compact cars had the lowest average incentives per vehicle sold, $584, followed by sports cars at $942. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 14.8 percent, followed by large SUVs at 12.7 percent of sticker price. Luxury sport cars averaged the lowest, 2.2 percent, followed by sports cars at 3.3 percent of sticker price.

    “Even though fuel prices have remained relatively low for a number of weeks, most gas-guzzling vehicles require generous rebates to catch the attention of consumers,” observed Dr. Liu.
    http://www.theautochannel.com/news/2...01/027300.html

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    I think the bolded section is important - incentive as a percentage of MSRP is the more telling figure. If somebody offered a $25,000 discount on a Ferrari Enzo, it's still enormously profitable for Ferrari if you buy one.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Still, it looks as if DCX is taking quite a sacking. I'd imagine that four grand off in a lineup that typically doesn't exceed forty grand will sting some, especially when sales were weak prior to the discounts.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by DuSpinnst
    That is what December is all about, everyone wants to shore up that Annual Report.
    Well at least the manufacturer doing all the price cutting isn't Toyota or else we would have had at least 80 posts by now with everyone using the price cuts as proof that that Toyota sucks.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by guitarlix
    Well at least the manufacturer doing all the price cutting isn't Toyota or else we would have had at least 80 posts by now with everyone using the price cuts as proof that that Toyota sucks.
    again, so cynical and ill-predicting...

    no we'd have their sales through the roof and people would see toyota marketshare at 20% for the month of December, thats what might happen.

    CobaltSScrazy

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by CobaltSScrazy
    again, so cynical and ill-predicting...

    no we'd have their sales through the roof and people would see toyota marketshare at 20% for the month of December, thats what might happen.

    CobaltSScrazy
    What is "again" supposed to mean? I was just being facetious. Incase you haven't noticed, mention the word "Toyota" and the thread degenerates into a bashfest given the slightest opportunity.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Hmmm.
    I wonder if the leasing is a sign of overreaching by image-conscious shoppers or just rich people who want to look trendy and not keep a car for very long (5 years).

    I wonder what percentage of GM and Lexus buyers lease. Any stats?

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by uboys
    Hmmm.
    I wonder if the leasing is a sign of overreaching by image-conscious shoppers or just rich people who want to look trendy and not keep a car for very long (5 years).

    I wonder what percentage of GM and Lexus buyers lease. Any stats?
    I'll see if I can find the stats, but I believe Cadillac, Lexus and pretty much all mainstream luxury brands do well over 50% leasing.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by Murrow
    I'll see if I can find the stats, but I believe Cadillac, Lexus and pretty much all mainstream luxury brands do well over 50% leasing.
    I found some numbers from an "Automotive News" article in March re: February lease numbers. I'll see if I can find any numbers for Cadillac.

    Saab: 66.5%
    BMW: 58.7%
    Jaguar: 64.7%
    Audi: 50.5%
    Source: Power Information Network

    "Leases were 45.7 percent of luxury new-vehicle transactions in February, up from 43.4 percent in the year-ago month, the Power network says."
    Last edited by Murrow; 12-03-2006 at 07:16 PM.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by Murrow
    I found some numbers from an "Automotive News" article in March re: February lease numbers. I'll see if I can find any numbers for Cadillac.

    Saab: 66.5%
    BMW: 58.7%
    Jaguar: 64.7%
    Audi: 50.5%
    Source: Power Information Network

    "Leases were 45.7 percent of luxury new-vehicle transactions in February, up from 43.4 percent in the year-ago month, the Power network says."
    Wow! Thanks! That is eye-opening!
    I never suspected leasing was all that popular on luxury cars (although I had heard that it was popular to do so in CA with BMWs and Porsches).

    I guess Lexus owners are in the same ballpark then...

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Quote Originally Posted by guitarlix
    What is "again" supposed to mean? I was just being facetious. Incase you haven't noticed, mention the word "Toyota" and the thread degenerates into a bashfest given the slightest opportunity.
    oh hehe, Didn't realize that, sometimes its hard to catch online. I don't think its any "worse" than it has been, as much as i Hate toyota, I have respect for them, their vehicles, and the engineering that goes into them. They are almost to the point of overengineering and thats what GM needs to do. DESIGN THE POWERTRAIN as the base in the vehicle, and package everything else AROUND that, instead of having design rule followed by packaging. Thats how the camry is designed, then lighten the vehicles to no end. That is key. If GM can somehow do that, it increases power to weight, improves fuel economy, handling, etc. etc. Japanese models usually are a couple hundred pounds lighter than their American counterparts.

    CobaltSScrazy

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Let me Guess, people finally figured BMW's are all talk and no show... so, they are stuck with them on the lot

    so, BMW is cutting deals on BMW's...

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    Yet when I test drove a corolla it felt like a tin can and handled like well a tin can. I think it was a 95 and they wanted 5 grand for it and will probably never sell it. I don't think the weight is all that problematic except for buick all that sound insulation is heavy. Direct injection really does need to make it to ALL gm motors and sooner than 2010.

    Leasing seems to make alot of sense on luxery cars why buy them when your just going to abuse them? Case and point BMWs dont last THAT well when driven hard and if you break something good luck fixing it. mbukukanyau, bmw makes nice cars no doubt ... Worth what they cost NO WAY not even close, but still really nice cars no less.

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    Re: Guess which Automaker is cutting deals....Chrysler....SAAB....BMW?

    My brother-in-law leases. He just traded in his Infiniti FX. He makes a pretty good living and just likes having different cars every few years.
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