SANTA MONICA, California — Despite the year-end incentives blitz and holiday marketing campaigns, automakers actually spent less on incentives in December than they did a year ago or even in November.
Edmunds.com estimates the average automotive manufacturer incentive was $2,542 per vehicle sold in December, down $167, or 6.2 percent, from November, and down $320, or 11.2 percent, from December 2008.
"In December, only about a quarter of new cars sold were leftover 2009 models. That sent the average incentive expenditure lower compared to November and last December when the old model year vehicles made up closer to half of the new car sales," said Jessica Caldwell, Edmunds.com's director of industry analysis.
Yet it was the hefty deals on the 2009s that grabbed headlines. And they were hefty. "If we only look at 2009 model year vehicles, where the real deals were, automakers spent an average of $4,317 per vehicle sold in December," said Caldwell.
In particular, close-out deals for General Motors' soon-to-be-orphaned Saturn and Pontiac brands, which resulted in as much as $6,500 off every vehicle, and the hype surrounding those deals sent consumers to the Internet and dealerships in droves.
A Wall Street Journal story on GM offering $7,000 per vehicle dealer incentives on leftover Saturns and Pontiacs generated loads of media hype. Dealerships were flooded with bargain-hunting buyers, GM reports. "Saturn" and "Pontiac" were near the top of the Google charts in most searched words. Edmunds.com saw activity for the two brands soar by about 10 times the average.
In reality, the sale on Pontiacs and Saturns was totally overhyped, in part because there weren't that many to sell. However, the urgency of the closeout sale motivated people to storm the dealerships — a pure psychological reaction to a shortage.
Edmunds.com initially estimated less than 5,000 are in inventory; GM reported Tuesday afternoon that only 800 Pontiacs and 900 Saturns now remain, bringing current inventory at this writing to 78 percent 2010 models and 22 percent 2009 models.
Inside Line says: Bargain shoppers help deliver a strong finish to a tough year. — Michelle Krebs, Senior Analyst and AutoObserver.com Editor at Large
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