Edmunds.com, the premier online resource for automotive information, estimated today that the average automotive manufacturer incentive in the U.S. was $2,356 per vehicle sold in June 2008, up $32, or 1.4 percent, from May 2008, and down $22, or 0.9 percent, from June 2007.

“General Motors and Toyota were the only two companies to have increased incentives this month from last year with Toyota incentives reaching a record high,” stated Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. “General Motors last minute 72-hour sales campaign helped increase their incentives spending for the month and Toyota needed some additional dollars to move their large SUVs and trucks from dealer lots.”

Edmunds.com’s monthly True Cost of Incentives^SM (TCI^SM) report takes into account all automakers’ 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.

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,213 per vehicle sold in June 2008, down from $3,349 in May 2008. From May 2008 to June 2008, European automakers increased incentives spending by $299 to $3,048 per vehicle sold; Japanese automakers increased incentives spending by $135 to $1,404 per vehicle sold; and Korean automakers decreased incentives spending by $22 to $1,951 per vehicle sold.

In June 2008, the industry’s aggregate incentive spending is estimated to have totaled approximately $2.84 billion, down 12.3 percent from May 2008. Chrysler, Ford and General Motors spent an aggregate of $1.7 billion, or 60.3 percent of the total; Japanese manufacturers spent $712 million, or 25.0 percent; European manufacturers spent $278 million, or 9.8 percent; and Korean manufacturers spent $140 million, or 4.9 percent.

“More of the same this month with continued high levels of incentives being spent on large SUVs and trucks,” commented Edmunds’ AutoObserver.com Senior Editor Michelle Krebs. “We expect Chrysler and Ford will become more aggressive to decrease inventories of their current Dodge Ram and F-150 before they introduce their replacements.”

Among vehicle segments, large SUVs had the highest average incentives, $5,097 per vehicle sold, followed by large trucks at $4,329. Sport cars had the lowest average incentives per vehicle sold, $1,128, followed by compact cars at $1,168. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large SUVs averaged the highest, 13.5 percent, followed by large trucks at 13.3 percent of sticker price. Sport cars averaged the lowest, 3.9 percent, followed by luxury sport cars at 4.9 percent of sticker price.

Comparing all brands, in June MINI spent the least at $125 followed by Scion at $223 per vehicle sold. At the other end of the spectrum, Saab spent the most, $7,215, followed by Cadillac at $6,612 per vehicle sold. Relative to their vehicle prices, Saab and HUMMER spent the most, 20.6 percent and 15.2 percent of sticker price, respectively; while MINI spent 0.6 percent and Scion spent just 1.3 percent.

But for now, he added, CarMax can’t give investors any meaningful guidance for the rest of 2008.

Richmond, Va.-based CarMax does have an innovative growth proposition, and its concept has drawn a lot of attention since the company began in 1993 as a unit of Circuit City Stores Inc. before being spun off six years ago.

Contrasting with the adversarial sales tack used by most dealers, CarMax takes a “no haggle” approach that aims to develop customer loyalty and foster repeat business. Its sales people make the same commission, regardless of what vehicle they sell, so they have no incentive to badger customers to buy pricier, higher-margin models.

CarMax competitors have found that idea tough to copy.

In the current roiled auto markets, though, it may be difficult for any used-auto dealer to have a friendly transaction with customers. Wholesale prices for larger vehicles have fallen by about 25 percent this spring, or four times the typical pace of depreciation, according to CarMax’s first-quarter report.

On average, someone trading in a large SUV now is getting $3,100 less than two years ago, says Jessica Caldwell, manager of pricing and industry analysis at Edmunds.com, which tracks auto industry trends.

Making matters worse, a large number of such vehicles are bought with dealer financing. “People just can’t afford to write a multithousand-dollar check to get out of [owning] a sport utility” and switch to a hybrid, CarMax’s Folliard said in the conference call.

Still, there are many reasons to think that CarMax will weather the storm and perhaps emerge stronger.

The U.S. used-car market is highly fragmented, comprising some 21,500 franchised new-car dealerships and 43,000 independent used-car dealers.

With annual sales of more than $8 billion, CarMax still has a relatively modest share of a $340 billion used-car market, and that share has continued to grow despite the sagging market.

The company has been expanding into new markets around the country with new superstores, which total more than 90. That growth will continue, executives said.

And despite ongoing jitters in parts of the credit markets, CarMax recently found the asset-backed bond market receptive to a $742 million auto loan securitization. That makes it easier for the company to maintain its lending business.

Justin Fuller, an equity strategist at Morningstar Inc., has been watching for CarMax shares (KMX) to cheapen up, expecting swelling new-car inventories to pressure—and take demand away from—the used-car market. Such developments would make the shares a long-term buy, he said.

“CarMax is a big company. It has a lot of financial resources, and it can live through this,” Fuller said. Many smaller used-car dealerships probably won’t, he added.

Advertised new car prices are easy to find. But actual automobile sale prices, the final sale figures reached through dealer-seller negotiation, have been hard to pin down. Many new-car pricing sites, run by industry insiders rather than consumers, offer list or dealer-derived prices rather than real-life final sale prices.

Until now, that is. DealerDrop.com today announced the launch of its new car pricing site, an online community that allows consumers to view and share data on the final sale price of their new car. DealerDrop.com is an interactive web site designed to inform people about actual sales prices being offered on new cars, helping them to understand local pricing at a glance and allowing them to make smarter decisions when purchasing a new vehicle. The site empowers new car shoppers, allowing them to research other people’s final car sale prices to find out how much they should expect to pay for their new car.

DealerDrop’s simple interface and powerful search function features provide consumers with the ability to hone in on prices based on sub-model, dealership, and geographic area. In addition to finding actual new car prices, consumers are able to review and share additional information, including

– Specific pricing data for vehicles, down to the trim level
– Dealership performance ratings

Finding this information on DealerDrop.com is absolutely free, and does not require users to register.

“We created DealerDrop to allow consumers to discover quickly what the actual sales price for a new car in their area is— something none of the leading web sites provide,” said Eric Rafia, DealerDrop CEO. “In addition, we plan to add additional tools that take the headache out of the new car negotiating process.”

About DealerDrop.com
DealerDrop.com is a site focused on empowering automotive consumers, providing them with the tools and information needed to purchase a new car at a great price. DealerDrop.com brings new car shoppers together, allowing them to share their pricing and buying experience data. To search the DealerDrop database, visit www.dealerdrop.com.  

Business Leader Media is proud to reveal 2008’s Top 100 Small Businesses in North Carolina.

The only car dealership, new or used, named to this prestigious list was Winston-Salem based Frank Myers Auto Maxx. They were recognized as the number 22 small business in the entire state. The trio of independent dealerships, owned by Certified Master Dealer Tracy Myers, realized an astonishing 1 year growth of 35% and a 5 year growth of a whopping 141%. What makes these numbers so stunning is that the used car industry as a whole is in a downward spiral, with no immediate recovery in site.

“The honor of being named one of the top 22 small businesses in North Carolina is simply a testament to my father’s belief that if you surround yourself with good people, they’ll push you to the top,” said Tracy Myers. “If anyone deserves the credit for this recognition, it is my incredible staff because they continue to do just that…push me to the top.”

Tracy continued, “It is unfortunate that the automotive industry, used cars in particular, has such a bad reputation with consumers. I hope this honor will help folks understand that the majority of dealers are good people trying to make an honest living. I am a Christian Business Owner and my goal is to run my dealership by the Book. As an industry leader, I have declared war against unscrupulous car dealers, new and used, and I promise to clear the air and settle the score by exposing the lies, scams and cons that have costs consumers billions of dollars.”

The 2008 winners were ranked based on revenue growth, business achievement and community involvement and were chosen from 367 finalists. The rankings and profiles of the companies will appear in the June issue of Triad Business Leader magazine and online at www.TriadNewsWire.com.

About Business Leader Media:
Business Leader Media is the #1 way to own this market. Founded in 1989, Business Leader’s publications, Web sites and events provide critical market intelligence to CEOs and business owners. The company publishes monthly business magazines in the Triad, Triangle, Charlotte and South Florida, as well as nationally through newsstand distribution.

CARCHEX, the trusted resource for professional automotive services for consumers, strategic partners and dealers, today announced that CEO Jason Goldsmith received the Ernst & Young Entrepreneur Of The Year® 2008 Award in the Emerging Entrepreneur category in Maryland. According to Ernst & Young LLP, the award recognizes outstanding entrepreneurs who are building and leading dynamic, growing businesses. Goldsmith was selected by an independent panel of judges, and the award was presented at a gala event at the Baltimore Marriott Waterfront Hotel on June 19, 2008.

Goldsmith, 32, is the youngest of this year’s seven Maryland award winners. During his acceptance remarks, Goldsmith spoke of his pride at being a Maryland-based company and being among an elite group of past E&Y winners including Kevin Plank, founder of Under Armour, and Scott and John Ferber, co-founders of Advertising.com.

“Companies like Under Armour and Advertising.com set the gold standard for entrepreneurship in Maryland in the last decade and I am thrilled to be counted among the founders of those incredible companies in winning this award,” said Goldsmith. “Maryland is a great state for business and CARCHEX is proud to call it our home.”

CARCHEX was founded in 2001 as a provider of vehicle inspection services. Since 2003, when Jason Goldsmith purchased the company, CARCHEX has added several more consumer assurance products to its business. The company is one of the largest and most trusted names in the Vehicle Service Contract (VSC) or extended warranty industry, offering competing products direct to consumers from only A-rated administrators and insurers.

In 2007, CARCHEX launched the CARCHEX Advantage™ step-by-step automotive purchasing guide, including web tools available 24/7 and Car Buying Concierge agents available by phone to answer questions and help negotiate the best deal on a new or used car.

The Ernst & Young Entrepreneur of the Year awards program celebrates its 22nd anniversary this year. The program honors entrepreneurs who have demonstrated exceptionality in such areas as innovation, financial performance and personal commitment to their businesses and communities.

“Ernst & Young is pleased to honor outstanding business leaders such as Jason Goldsmith,” said Harry Thomasian Jr., Ernst & Young Entrepreneur Of The Year Program Director for Maryland. “Winners of the Entrepreneur Of The Year award build leading businesses and contribute a great deal to the communities around them. Their success helps our area grow stronger.”

As a Maryland award winner, Goldsmith is now eligible for consideration for the Ernst & Young Entrepreneur of the Year 2008 national program. Award winners in several national categories, as well as the overall national Ernst & Young Entrepreneur of the Year award winner, will be announced at the annual awards gala in Palm Springs, California on November 15, 2008. The awards are the culminating event of the Ernst & Young Strategic Growth Forum, the nation’s most prestigious gathering of high-growth, market-leading companies.