Last months U.S. auto manufacturer incentives reached their highest December levels in at least six years, auto information site Edmunds.com says.
Incentives averaged $2,902 per vehicle last month, up 18 percent from December 2007. The average was the third straight peak in recorded monthly discounts, as incentives mounted in October and November amid the lowest demand in a quarter-century.
Automakers boosted incentives to raise consumer confidence, Edmunds.com analyst Jessica Caldwell said. Consumer confidence hit a low last month in the monthly index conducted since 1967 by the Conference Board, a market information group.
But last months dismal vehicle sales -- down 35.6 percent from December 2007 -- show that incentives arent working, Caldwell said.
Theyve been spending more and more money to try and entice anyone to come into a showroom, Caldwell said. Theyre offering more and more money, but its not really leading to any more sales.
Toyota Motor Sales U.S.A. Inc. saw the largest percentage boost in incentives, almost doubling the company-record December incentives it offered in 2007. Last months Toyota incentives averaged $1,995, an 87 percent climb from December 2007. The automaker still saw December sales plunge 36.7 percent.
The drop marked Toyotas second-straight drop of more than one-third, despite offering 0 percent financing on select vehicles since October.
Ford offered the highest incentive amounts: $4,029 per vehicle. Chrysler LLC followed, offering an average of $3,667. General Motors averaged $3,661, Nissan North America $2,251 and American Honda Motor Co. $1,218 per vehicle.
Lincoln ($5,975) and Saab ($5,508) spent the most per vehicle of any brands. Mercury and Jeep topped the industry in incentives as a percentage of sticker price, offering deals worth 15 percent of their vehicle prices.
Full-sized pickups averaged the highest incentives of any segment, giving consumers 16.5 percent of the sticker price.
Even though increased incentives havent meant higher sales, automakers probably wont decrease incentive spending, at least for a while now, Caldwell said.
A lot of consumers are used to these deals, she said. Once you put it out there, its hard to take it back.
Edmunds.com includes interest rates, lease deals and rebates to dealers and consumers in its incentive measurement. The auto information site has studied incentives for six years.