SANTA MONICA, has reported that the average manufacturer automotive incentive in the United States was $2,395 per vehicle sold in November 2004, up $9, or 0.4 percent, from November 2003, and down $260, or 9.8 percent, from October 2004.´s monthly True Cost of Incentives 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, 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 $3,379 per vehicle sold in November, down $283 from October 2004. Chrysler lowered incentives spending in November by $215 to $3,429 per vehicle sold while increasing market share by 0.9 percent to 13.8 percent. Ford decreased incentives spending by $270 to an average of $3,141 per vehicle sold, while its market share fell by 0.4 percent to 18.0 percent. GM lowered incentives spending in November by $339 to $3,519 while its market share dropped 0.7 percent to 24.6 percent – a historical low.

"The kind of incentives that helped to jump start the automotive industry from its lull three years ago has lost its effectiveness to create new potential buyers. The domestic automakers have made the most of incentives in recent years, and are beginning to accept that consumers, who have been bombarded with messages of cash back and special financing, are becoming relatively insensitive to those offers," stated Dr. Jane Liu, vice president of Data Analysis for "It´s supply and demand: the continued success of models like the Chrysler 300 and the Dodge Magnum, and brands like Mini and Scion, prove that consumers will enthusiastically purchase an exciting, high-quality product even in the absence of any incentives. GM and Ford, aware of the need to reduce the supply of less popular models, recently announced that they will be cutting production."

In November 2004, Korean automakers reduced incentives spending by $357 to average $1,828 per vehicle sold, European automakers reduced incentives spending by $565 to average $1,765 per vehicle sold and Japanese automakers reduced incentives spending by $41 to average $888 per vehicle sold in October.

From October to November, Korean and European manufacturers grew their market share from 4.15 percent to 4.44 percent and 7.25 percent to 7.53 percent, respectively. At the same time, Japanese and domestic manufacturers both lost market share, with the Japanese dropping from 31.9 percent to 31.5 percent and the domestics falling from 56.51 percent to 56.3 percent.

"The decline in average TCI from October to November reflects a seasonal trend, as this time of year many new model year vehicles are being sold with relatively low incentives," explained Dr. Liu. "Gains in market share for Koreans and Europeans can partially be attributed to strong sales of new and redesigned vehicles like the Hyundai Tucson and the Volvo S40."

Comparing all brands, in November Mini spent virtually nothing on incentives and Scion spent only $83, while Lexus spent only $164 per vehicle sold. At the other end of the spectrum, Lincoln was the biggest spender at $4,949 in November, followed by Jaguar at $4,872 and Cadillac at $4,184 per vehicle sold.

Among vehicle segments, in November large SUVs continued to offer the highest average incentives, $4,364 per vehicle sold. Other segments with high incentives were large cars at $3,004 and large trucks at $2,856 per vehicle sold. Compact cars had the lowest average incentives at $1,492, followed by luxury sports cars at $1,653 and luxury SUVs at $1,782 per vehicle sold.

Mid-size cars have lost the most market share since November 2003, decreasing from 16.4 percent to 14.6 percent, while large cars have gained the most market share during that period, up from 4.2 percent to 6.1 percent of the new vehicle market.