SANTA MONICA, Calif. — Manufacturer incentives in the U.S. continued inching higher in February, nearing the levels before automakers instituted reduced sticker price value pricing over incentives.

The higher incentives reflect lower industry sales, forecast by Edmunds.com to come in 2.3 percent below February 2007. Manufacturers post February 2008 sales reports on Monday.

Edmunds.com estimates the average automotive manufacturer incentive in the U.S. was $2,435 per vehicle sold in February 2008, up $22, or 0.9 percent, from January 2008, and up $188, or 8.4 percent, from February 2007.

"In recent months, incentives have been boosted to the levels we saw regularly before automakers instituted the ‘value pricing’ strategy that aimed to reduce sticker prices and minimize the need for incentives," said Jesse Toprak, executive director of Industry Analysis for Edmunds.com.

"To combat this soft market, automakers are once again putting remarkably generous dollar amounts on the hoods and ironically reestablishing consumer expectations that they will be offered dramatic deals," Toprak added. "It’s a car buyer’s market, and that will likely be true for months to come."

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,393 per vehicle sold in February 2008, up from $3,334 in January 2008. From January 2008 to February 2008, European automakers decreased incentives spending by $555 to $1,945 per vehicle sold,; Japanese automakers increased incentives spending by $22 to $1,313 per vehicle sold, and Korean automakers increased incentives spending by $603 to $1,807 per vehicle sold.

In February, the industry's aggregate incentive spending is estimated to have totaled approximately $2.95 billion, up 17.0 percent from January 2008. Chrysler, Ford and General Motors spent an aggregate of $2.1 billion, or 70.8 percent of the total; Japanese manufacturers spent $604 million, or 20.5 percent; European manufacturers spent $162 million, or 5.5 percent; and Korean manufacturers spent $95 million, or 3.2 percent.

February is an interesting month, as it follows the slowest month of the year and includes traditional shopping holidays, such as President’s Day. In addition, February had an extra day because 2008 is a leap year. Some automakers latched onto these events as sales opportunities. The month saw things like Honda outspending Toyota on incentives — a rare event. Meantime, BMW cut its incentive spend by two-thirds compared with January, single-handedly pulling down the European average below last year’s despite other automakers’ slight increases in spending.

Among vehicle segments, large trucks — particularly hard-hit by soft sales — continued to have the highest average incentives, $4,466 per vehicle sold, followed by large SUVs at $3,702. Compact cars had the lowest average incentives per vehicle sold, $1,065, followed by sport cars at $1,356.

Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.9 percent, followed by large cars at 12.5 percent of sticker price. Luxury sports cars averaged the lowest, 2.9 percent, followed by sports cars at 4.7 percent of sticker price.

Comparing all brands, February continued some trends seen throughout the past year. Mini spent the least — virtually nothing — followed by Scion at $182 per vehicle sold. At the other end of the spectrum, Saab spent the most, $6,266, followed by Cadillac at $5,878 per vehicle sold. Relative to their vehicle prices, Saab and Pontiac spent the most, 17.6 percent and 16.8 percent of sticker price, respectively; Mini spent virtually nothing and Porsche spent just 1.1 percent.

Edmunds.com's monthly True Cost of Incentives (TCI) 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.

True Cost of Incentives for the "Big Six" Automakers