Chrysler LLC spent an average of $5,566 per vehicle on incentives in February, up 29.7 percent from January, according to Edmunds.com, which said the number was a record for the automaker.
Chrysler spent at least $2,000 more per vehicle than any other automaker, according to the estimate. General Motors spent an average of $3,584 in February, up 14.2 percent from January, and Ford Motor Co. spent an average of $3,430, down 2.1 percent from January.
The incentives at Chrysler had a slight impact -- the automakers sales drop in February was less than the drops at GM and Ford. But Chrysler still saw sales plunge 44.0 percent over February 2008 to 84,050 vehicles.
All told, automakers spent an average of $2,914 per vehicle sold in February, up $216, or 8 percent, from January.
Automakers are spending at remarkable levels, but it is worth noting that in February, 27 percent of new-car intenders switched to a used vehicle at the dealership, said Edmunds.com CEO Jeremy Anwyl in a statement.
Michelle Krebs, senior editor of Edmunds AutoObserver, said plummeting industry sales show the incentives arent having the desired effect.
Consumers are simply not motivated to buy based on what they are seeing in the marketplace and are instead waiting for a boost of economic confidence.
Honda spent the least
Of the six major automakers, Honda averaged the least -- $1,249 -- down 9.1 percent from January. Nissan spent an average of $2,509, up 16.5 percent; and Toyota spent $1,744, up 12.5 percent.
Regarding the ballooning Chrysler figure, Edmunds analyst Jesse Toprak said the Edmunds estimate included the employee price.
Chrysler is subsidizing the sales price with the employee discount, which is kind of a cash incentive, Toprak said.
Steven Landry, executive vice president for North America sales, marketing and service, said Chrysler did not use any of the $4 billion federal loan it received Jan. 2 on incentive spending.
Its built into the margin, Landry said. Were not spending anything incrementally prior to what we had in the plans. Some of those plans were conceived before Chrysler received the federal loan, he said.
A Chrysler executive disputed the Edmunds calculation.
We believe GM and Ford have some programs Edmunds is not accounting for that would bring the GM and Ford averages much higher.
Edmunds said it had discussed the numbers with Chrysler and was standing by its calculations.
The incentives came during a month when Chrysler offered a program called Employee Plus Plus, which gave all customers the same prices Chrysler employees get plus existing incentives and low APR financing.
Chrysler is asking for $5 billion more from the federal government.
In January, Chryslers U.S. sales fell 54.8 percent from January 2008, the largest decline among major automakers. Speaking at the Geneva auto show today, Chrysler co-President Jim Press said Chrysler expects that February sales results will show that it gained retail share.
It looks like our retail sales versus last year will be a much better picture than our competitors, Press said. Our retail share will go up.
He attributed that rise to availability of consumer financing after Chrysler Financial received $1.5 billion in federal Troubled Asset Relief Program funds: That goes right to the consumer. That money has hit directly. Weve really been heartened.
Edmunds.com includes interest rates, lease deals and rebates to dealers and consumers in its incentive measurement. The site has studied incentives for seven years.
Dave Guilford contributed to this report