Market Overview

February Auto Sales Revenue to Hit $44 Billion

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ALG,
the industry benchmark for determining the future resale value of a
vehicle, projects U.S. revenue from new vehicle sales will reach $44
billion for the month of February, up 0.4 percent from a year ago.

Automakers should post a $188 million gain in revenue due to healthy
overall gains in average transaction prices.

Average Transaction Prices in February 2017 declined by 0.7 percent
compared to the prior month while showing a gain of 1.9 percent over the
prior year.

"A sizeable gain in average transaction prices is offsetting higher
incentive spending, landing the ratio of incentives to ATP at 10.3%,"
said Eric Lyman, ALG's chief analyst. "From ALG's viewpoint, incentive
spending as a percentage of ATP of 10% or lower represents a healthy
retail sales environment for the industry."

ALG estimates the average transaction price (ATP) for a new light
vehicle was $33,307 in February, up 1.9 percent from a year ago. Average
incentive spending per unit grew by $409 to $3,443.

"It's positive to see incentives relative to ATP pull back from the
higher levels in Q4 of 2016. We also expect lower inventories combined
with an uptick in demand during the Spring selling season to bring
further relief in this key metric of industry health," said Lyman.

Average Transaction Price (ATP)

Manufacturer

   

Feb. 2017
Forecast

   

Feb. 2016

   

Jan. 2017

   

Percent Change
vs. Feb. 2016

   

Percent Change
vs. Jan. 2017

BMW (BMW, Mini)     $49,108     $51,709     $51,154     -5.0%     -4.0%
Daimler (Mercedes-Benz, Smart)     $60,723     $56,001     $58,901     8.4%     3.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     $32,223     $32,660     $33,392     -1.3%     -3.5%
Ford (Ford, Lincoln)     $35,871     $33,993     $36,756     5.5%     -2.4%
GM (Buick, Cadillac, Chevrolet, GMC)     $36,400     $36,724     $36,828     -0.9%     -1.2%
Honda (Acura, Honda)     $27,059     $27,535     $27,589     -1.7%     -1.9%
Hyundai     $24,066     $23,784     $23,633     1.2%     1.8%
Kia     $23,194     $22,721     $22,984     2.1%     0.9%
Nissan (Nissan, Infiniti)     $24,234     $26,861     $27,957     -9.8%     -13.3%
Subaru     $27,866     $27,738     $28,144     0.5%     -1.0%
Toyota (Lexus, Scion, Toyota)     $33,726     $31,230     $31,872     8.0%     5.8%
Volkswagen (Audi, Porsche, Volkswagen)     $34,789     $32,658     $33,230     6.5%     4.7%

Industry

   

$33,307

   

$32,691

   

$33,545

   

1.9%

   

-0.7%

                   

Incentive per Unit Spending

Manufacturer

   

Feb. 2017
Forecast

   

Feb. 2016

   

Jan. 2017

   

Percent Change
vs. Feb. 2016

   

Percent Change
vs. Jan. 2017

BMW (BMW, Mini)     $4,450     $4,584     $4,032     -2.9%     10.4%
Daimler (Mercedes-Benz, Smart)     $4,415     $3,754     $4,465     17.6%     -1.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     $4,227     $3,916     $4,219     7.9%     0.2%
Ford (Ford, Lincoln)     $4,097     $3,317     $4,144     23.5%     -1.1%
GM (Buick, Cadillac, Chevrolet, GMC)     $4,550     $4,022     $4,587     13.1%     -0.8%
Honda (Acura, Honda)     $2,168     $1,490     $2,095     45.5%     3.5%
Hyundai     $2,182     $2,099     $2,176     3.9%     0.3%
Kia     $3,383     $2,872     $3,366     17.8%     0.5%
Nissan (Nissan, Infiniti)     $3,975     $3,396     $3,993     17.1%     -0.4%
Subaru     $896     $557     $966     60.9%     -7.2%
Toyota (Lexus, Scion, Toyota)     $2,157     $2,102     $2,212     2.6%     -2.5%
Volkswagen (Audi, Porsche, Volkswagen)     $3,466     $3,386     $3,418     2.4%     1.4%

Industry

   

$3,443

   

$3,034

   

$3,472

   

13.5%

   

-0.8%

                   

Incentive Spending as a Percentage of ATP

Manufacturer

   

Feb. 2017
Forecast

   

Feb. 2016

   

Jan. 2017

   

Percent Change
vs. Feb. 2016

   

Percent Change
vs. Jan. 2017

BMW (BMW, Mini)     9.1%     8.9%     7.9%     2.2%     15.0%
Daimler (Mercedes-Benz, Smart)     7.3%     6.7%     7.6%     8.5%     -4.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     13.1%     12.0%     12.6%     9.4%     3.8%
Ford (Ford, Lincoln)     11.4%     9.8%     11.3%     17.0%     1.3%
GM (Buick, Cadillac, Chevrolet, GMC)     12.5%     11.0%     12.5%     14.1%     0.4%
Honda (Acura, Honda)     8.0%     5.4%     7.6%     48.1%     5.5%
Hyundai     9.1%     8.8%     9.2%     2.7%     -1.5%
Kia     14.6%     12.6%     14.6%     15.4%     -0.4%
Nissan (Nissan, Infiniti)     16.4%     12.6%     14.3%     29.8%     14.9%
Subaru     3.2%     2.0%     3.4%     60.1%     -6.3%
Toyota (Lexus, Scion, Toyota)     6.4%     6.7%     6.9%     -5.0%     -7.9%
Volkswagen (Audi, Porsche, Volkswagen)     10.0%     10.4%     10.3%     -3.9%     -3.2%

Industry

   

10.3%

   

9.3%

   

10.3%

   

11.4%

   

-0.1%

                   

(Note: This forecast is based solely on ALG's analysis of industry
sales trends and conditions and is not a projection of the company's
operations.)

About ALG

Founded in 1964 and headquartered in Santa Monica, California, ALG
is an industry authority on automotive residual value projections in
both the United States and Canada. By analyzing nearly 2,500 vehicle
trims each year to assess residual value, ALG provides auto industry and
financial services clients with market industry insights, residual value
forecasts, consulting and vehicle portfolio management and risk
services. ALG is a wholly-owned subsidiary of TrueCar,
Inc
., a digital automotive marketplace that provides comprehensive
pricing transparency about what other people paid for their cars. ALG
has been publishing residual values for all cars, trucks and SUVs in the
U.S. for over 50 years and in Canada since 1981.

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