Market Overview

March Auto Sales Revenue to Hit $52 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 $52
billion for the month of March, up 2.2 percent from a year ago.

Higher than average transaction prices should help automakers post a
$1.1 billion gain in revenue versus March 2016 despite a projected 13.4
percent increase in incentive spending.

"The industry continues to see strength in year-over-year average
transaction price growth; however, there is concern over increasing
incentive spending to generate incremental sales beyond organic demand,"
said Oliver Strauss, ALG's chief economist.

ALG estimates the average transaction price (ATP) for a new light
vehicle was $33,045 in March, up 2 percent from a year ago. Average
incentive spending per unit grew by $415 to $3,511. The ratio of
incentive spending to ATP is expected to be 10.6 percent, up from 9.6
percent a year ago.

"Hefty incentives have negative impacts to resale values, and that can
be even more potent in combination with a heavier mix of leasing being
used across both the mainstream and luxury segments," said Strauss.

"New model introductions aligning with the start of Spring and tax
season rebates could potentially help curb incentive spending, while
boosting intrinsic demand and further increasing transaction prices,"
continued Strauss.

 

Average Transaction Price (ATP)

           
Manufacturer    

Mar. 2017
Forecast

 

Mar. 2016

  Feb. 2017  

Percent Change
vs. Mar. 2016

 

Percent Change
vs. Feb. 2017

BMW (BMW, Mini)     $51,600   $51,725   $53,070   -0.2 %   -2.8 %
Daimler (Mercedes-Benz, Smart)     $62,440   $56,039   $59,890   11.4 %   4.3 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     $33,867   $32,680   $33,867   3.6 %   0.0 %
Ford (Ford, Lincoln)     $35,483   $33,987   $36,002   4.4 %   -1.4 %
GM (Buick, Cadillac, Chevrolet, GMC)     $35,078   $36,723   $36,350   -4.5 %   -3.5 %
Honda (Acura, Honda)     $27,484   $27,538   $27,660   -0.2 %   -0.6 %
Hyundai     $23,363   $23,729   $23,549   -1.5 %   -0.8 %
Kia     $23,345   $22,713   $23,025   2.8 %   1.4 %
Nissan (Nissan, Infiniti)     $27,671   $26,855   $27,951   3.0 %   -1.0 %
Subaru     $27,507   $27,734   $28,126   -0.8 %   -2.2 %
Toyota (Lexus, Scion, Toyota)     $31,605   $31,226   $31,729   1.2 %   -0.4 %
Volkswagen (Audi, Porsche, Volkswagen)     $32,800   $32,647   $32,965   0.5 %   -0.5 %
Industry     $33,045   $32,404   $33,318   2.0 %   -0.8 %
 
           

Incentive per Unit Spending

 
Manufacturer    

Mar. 2017
Forecast

  Mar. 2016  

Feb. 2017

 

Percent Change
vs. Mar. 2016

 

Percent Change
vs. Feb. 2017

BMW (BMW, Mini)     $4,514   $5,128   $4,245   -12.0 %   6.3 %
Daimler (Mercedes-Benz, Smart)     $4,151   $3,714   $4,111   11.8 %   1.0 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     $4,327   $4,043   $4,362   7.0 %   -0.8 %
Ford (Ford, Lincoln)     $3,983   $3,509   $4,011   13.5 %   -0.7 %
GM (Buick, Cadillac, Chevrolet, GMC)     $4,892   $4,029   $5,125   21.4 %   -4.5 %
Honda (Acura, Honda)     $1,941   $1,528   $1,886   27.0 %   2.9 %
Hyundai     $2,341   $2,193   $2,342   6.7 %   -0.1 %
Kia     $2,945   $2,838   $2,978   3.8 %   -1.1 %
Nissan (Nissan, Infiniti)     $4,074   $3,466   $4,080   17.5 %   -0.2 %
Subaru     $901   $568   $950   58.6 %   -5.2 %
Toyota (Lexus, Scion, Toyota)     $2,208   $2,082   $2,259   6.1 %   -2.3 %
Volkswagen (Audi, Porsche, Volkswagen)     $3,808   $3,348   $3,789   13.7 %   0.5 %
Industry     $3,511   $3,096   $3,587   13.4 %   -2.1 %
 
           

Incentive Spending as a Percentage of ATP

 
Manufacturer    

Mar. 2017
Forecast

  Mar. 2016   Feb. 2017  

Percent Change
vs. Mar. 2016

 

Percent Change
vs. Feb. 2017

BMW (BMW, Mini)     8.7 %   9.9 %   8.0 %   -11.8 %   9.4 %
Daimler (Mercedes-Benz, Smart)     6.6 %   6.6 %   6.9 %   0.3 %   -3.1 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     12.8 %   12.4 %   12.9 %   3.3 %   -0.8 %
Ford (Ford, Lincoln)     11.2 %   10.3 %   11.1 %   8.7 %   0.7 %
GM (Buick, Cadillac, Chevrolet, GMC)     13.9 %   11.0 %   14.1 %   27.1 %   -1.1 %
Honda (Acura, Honda)     7.1 %   5.5 %   6.8 %   27.3 %   3.5 %
Hyundai     10.0 %   9.2 %   9.9 %   8.4 %   0.7 %
Kia     12.6 %   12.5 %   12.9 %   1.0 %   -2.5 %
Nissan (Nissan, Infiniti)     14.7 %   12.9 %   14.6 %   14.1 %   0.9 %
Subaru     3.3 %   2.0 %   3.4 %   59.9 %   -3.0 %
Toyota (Lexus, Scion, Toyota)     7.0 %   6.7 %   7.1 %   4.8 %   -1.9 %
Volkswagen (Audi, Porsche, Volkswagen)     11.6 %   10.3 %   11.5 %   13.2 %   1.0 %
Industry     10.6 %   9.6 %   10.8 %   11.2 %   -1.3 %
 

(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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