Market Overview

Automakers Expected to Reach $49 Billion in June

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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 $49
billion for the month of June, up 1.5 percent from a year ago.

ALG expects a decline of $678 million in revenue for automakers versus
June 2016. Additionally, incentive spending is projected to increase 9.7
percent.

"With the exception of Hyundai and Subaru, all automakers are showing
gains in Average Transaction Prices (ATP) on a year over year basis.
Mercedes-Benz showed the largest gains in ATP, up 5.6% thanks to the
success of the all new E Class and red-hot GLC Class," said Eric Lyman,
ALG's Chief Industry Analyst. "As a key indicator of retail industry
health, ALG is pleased to see incentive spending as a percentage of ATP
remain relatively flat. The industry continues to work through high
inventory levels, with incentives being utilized to offload aging
inventory. The rise in ATP can be attributed to more expensive light
trucks and well-equipped new vehicles with high-end features that
consumers are increasingly demanding."

ALG estimates ATP for a new light vehicle was $32,900 in June, up 1.5
percent from a year ago. Average incentive spending per unit grew by
$315 to $3,550. The ratio of incentive spending to ATP is expected to be
10.8 percent, up from 8.1 percent a year ago.

Average Transaction Price (ATP)

Manufacturer  

June 2017
Forecast

  June. 2016   May 2017  

Percent Change
vs.
June. 2016

 

Percent Change
vs.
May 2017

BMW (BMW, Mini)   $ 52,500   $ 51,300   $ 52,800   2.3 %   -0.6 %
Daimler (Mercedes-Benz, Smart) $ 59,900 $ 56,700 $ 60,200 5.6 % -0.5 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $ 33,300 $ 32,800 $ 33,100 1.5 % 0.6 %
Ford (Ford, Lincoln) $ 35,300 $ 34,900 $ 35,600 1.1 % -0.8 %
GM (Buick, Cadillac, Chevrolet, GMC) $ 37,700 $ 36,500 $ 37,400 3.3 % 0.8 %
Honda (Acura, Honda) $ 27,300 $ 27,000 $ 27,400 1.1 % -0.4 %
Hyundai $ 22,600 $ 23,500 $ 22,900 -3.8 % -1.3 %
Kia $ 22,700 $ 22,600 $ 22,800 0.4 % -0.4 %
Nissan (Nissan, Infiniti) $ 27,600 $ 27,100 $ 27,800 1.8 % -0.7 %
Subaru $ 27,500 $ 27,600 $ 27,800 -0.4 % -1.1 %
Toyota (Lexus, Scion, Toyota) $ 31,200 $ 31,000 $ 31,100 0.6 % 0.3 %
Volkswagen (Audi, Porsche, Volkswagen)   $ 36,200   $ 34,600   $ 34,700   4.6 %   4.3 %
Industry   $ 32,900   $ 32,400   $ 32,800   1.5 %   0.3 %
 

Incentive per Unit Spending

Manufacturer  

June. 2017
Forecast

  June 2016  

May 2017

 

Percent Change
vs.
June 2016

 

Percent Change
vs.
May 2017

BMW (BMW, Mini)   $ 4,157   $ 5,405   $ 4,149   -23.1 %   0.2 %
Daimler (Mercedes-Benz, Smart) $ 4,449 $ 4,746 $ 4,590 -6.3 % -3.1 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $ 4,389 $ 4,063 $ 4,434 8.0 % -1.0 %
Ford (Ford, Lincoln) $ 4,157 $ 3,681 $ 4,124 12.9 % 0.8 %
GM (Buick, Cadillac, Chevrolet, GMC) $ 4,361 $ 4,063 $ 4,219 7.3 % 3.4 %
Honda (Acura, Honda) $ 2,056 $ 1,720 $ 2,048 19.5 % 0.4 %
Hyundai $ 3,259 $ 2,291 $ 3,221 42.2 % 1.2 %
Kia $ 3,384 $ 2,707 $ 3,358 25.0 % 0.8 %
Nissan (Nissan, Infiniti) $ 4,148 $ 3,451 $ 4,114 20.2 % 0.8 %
Subaru $ 1,032 $ 632 $ 995 63.4 % 3.8 %
Toyota (Lexus, Scion, Toyota) $ 2,506 $ 2,293 $ 2,591 9.3 % -3.3 %
Volkswagen (Audi, Porsche, Volkswagen)   $ 3,460   $ 3,796   $ 3,432   -8.9 %   0.8 %
Industry   $ 3,550   $ 3,235   $ 3,499   9.7 %   1.4 %
 

Incentive Spending as a Percentage of ATP

Manufacturer  

June 2017
Forecast

  June 2016   May 2017  

Percent Change
vs.
June 2016

 

Percent Change
vs.
May 2017

BMW (BMW, Mini)   7.9 %   10.5 %   7.9 %   -24.8 %   0.8 %
Daimler (Mercedes-Benz, Smart) 7.4 % 8.4 % 7.6 % -11.3 % -2.6 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) 13.2 % 12.4 % 13.4 % 6.4 % -1.6 %
Ford (Ford, Lincoln) 11.8 % 10.5 % 11.6 % 11.6 % 1.7 %
GM (Buick, Cadillac, Chevrolet, GMC) 11.6 % 11.1 % 11.3 % 3.9 % 2.6 %
Honda (Acura, Honda) 7.5 % 6.4 % 7.5 % 18.2 % 0.7 %
Hyundai 14.4 % 9.7 % 14.1 % 47.9 % 2.5 %
Kia 14.9 % 12.0 % 14.7 % 24.5 % 1.2 %
Nissan (Nissan, Infiniti) 15.0 % 12.7 % 14.8 % 18.0 % 1.6 %
Subaru 3.8 % 2.3 % 3.6 % 64.0 % 4.9 %
Toyota (Lexus, Scion, Toyota) 8.0 % 7.4 % 8.3 % 8.6 % -3.6 %
Volkswagen (Audi, Porsche, Volkswagen)   9.6 %   11.0 %   9.9 %   -12.9 %   -3.4 %
Industry   10.8 %   10.0 %   10.7 %   8.1 %   1.1 %
 

(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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