Market Overview

ALG Finds Incentives Increase as August Auto Sales Dip

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SANTA MONICA, Calif., Sept. 01, 2017 (GLOBE NEWSWIRE) -- 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 August, up 1.7 percent from a year ago.

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ALG expects an increase of $820 million in revenue for automakers versus August 2016. Additionally, incentive spending is projected to increase 12.7 percent.

"Automakers continue to navigate the sales plateau with incentive spending outpacing ATP gains, primarily driven by excess supply from overproduction and an overweight mix of passenger cars," said Eric Lyman, ALG's Chief Industry Analyst. "Volkswagen continues to be a bright spot, with all-new key crossover segment product driving a substantial 6.5% year-over-year increase in ATP.

"Model year changeover in the 3rd quarter creates a seasonal spike in incentive spending, and 2017 is no different. ALG still expects overall spending to decline slightly over the long term as automakers acclimate to a lower overall sales volume in the industry," continued Lyman.

ALG estimates ATP for a new light vehicle was $32,346 in August, up 0.5 percent from a year ago. Average incentive spending per unit grew by $429 to $3,799. The ratio of incentive spending to ATP is expected to be 11.7 percent, up from 10.5 percent a year ago.

Average Transaction Price (ATP)

Manufacturer   Aug. 2017  
Forecast  
  Aug. 2016     July 2017     Percent Change vs.
Aug. 2016
Percent Change vs.
July 2017
BMW (BMW, Mini)   $51,231   $50,524   $51,539   1.4% -0.6%
Daimler (Mercedes-Benz, Smart)   $58,512   $57,933   $56,640   1.0% 3.3%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)   $33,502   $32,877   $33,481   1.9% 0.1%
Ford (Ford, Lincoln)   $35,484   $34,960   $35,236   1.5% 0.7%
GM (Buick, Cadillac, Chevrolet, GMC)   $36,263   $36,227   $37,170   0.1% -2.4%
Honda (Acura, Honda)   $27,272   $27,109   $27,463   0.6% -0.7%
Hyundai   $23,048   $23,035   $23,095   0.1% -0.2%
Kia   $22,312   $22,447   $22,357   -0.6% -0.2%
Nissan (Nissan, Infiniti)   $27,520   $26,901   $27,300   2.3% 0.8%
Subaru   $27,776   $27,860   $27,610   -0.3% 0.6%
Toyota (Lexus, Scion, Toyota)   $30,361   $30,792   $30,604   -1.4% -0.8%
Volkswagen (Audi, Porsche, Volkswagen)   $34,941   $32,808   $34,591   6.5% 1.0%
Industry     $32,346   $32,198   $32,411   0.5% -0.2%

Incentive per Unit Spending

Manufacturer   Aug. 2017  
Forecast  
  Aug 2016      

July 2017  
  Percent Change vs.
Aug 2016
  Percent Change vs.
July 2017
BMW (BMW, Mini)   $5,103   $6,480   $4,831   -21.2%   5.6%
Daimler (Mercedes-Benz, Smart)   $4,973   $4,371   $4,922   13.8%   1.0%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)   $4,650   $4,205   $4,479   10.6%   3.8%
Ford (Ford, Lincoln)   $4,577   $4,153   $4,387   10.2%   4.3%
GM (Buick, Cadillac, Chevrolet, GMC)   $4,546   $4,199   $4,304   8.3%   5.6%
Honda (Acura, Honda)   $2,226   $1,620   $2,046   37.4%   8.8%
Hyundai   $3,039   $2,420   $2,943   25.6%   3.3%
Kia   $4,112   $2,765   $3,865   48.7%   6.4%
Nissan (Nissan, Infiniti)   $4,743   $3,822   $4,530   24.1%   4.7%
Subaru   $1,170   $977   $1,099   19.7%   6.4%
Toyota (Lexus, Scion, Toyota)   $2,876   $2,412   $2,861   19.2%   0.5%
Volkswagen (Audi, Porsche, Volkswagen)   $3,723   $3,936   $3,567   -5.4%   4.4%
Industry   $3,799   $3,370   $3,638   12.7%   4.4%


Incentive Spending as a Percentage of ATP

Manufacturer       Aug. 2017  
   Forecast  
     Aug. 2016               July 2017       Percent Change vs.
August 2016
   Percent Change vs. 
July 2017
BMW (BMW, Mini)   10.0% 12.8%   9.4%   -22.3%   6.3%
Daimler (Mercedes-Benz, Smart)   8.5% 7.5%   8.7%   12.6%   -2.2%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)   13.9% 12.8%     13.4%   8.5%   3.8%
Ford (Ford, Lincoln)   12.9% 11.9%   12.5%   8.6%   3.6%
GM (Buick, Cadillac, Chevrolet, GMC)   12.5% 11.6%   11.6%   8.1%   8.3%
Honda (Acura, Honda)   8.2% 6.0%   7.4%   36.6%   9.6%
Hyundai     13.2% 10.5%   12.7%   25.5%   3.5%
Kia   18.4% 12.3%   17.3%   49.6%   6.6%
Nissan (Nissan, Infiniti)   17.2% 14.2%   16.6%   21.3%   3.9%
Subaru   4.2% 3.5%   4.0%   20.1%   5.8%
Toyota (Lexus, Scion, Toyota)   9.5% 7.8%   9.3%   20.9%   1.3%
Volkswagen (Audi, Porsche, Volkswagen)   10.7% 12.0%   10.3%   -11.2%   3.3%
Industry   11.7% 10.5%   11.2%   12.2%   4.6%

(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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Veronica Cardenas 
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VCardenas@truecar.com
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