ALG Expects Automaker Revenue to Remain Relatively Flat for the Month of November

Average transaction prices likely to rise 1.7 percent

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Dec 03, 2018, 07:00 ET

SANTA MONICA, Calif., Dec. 3, 2018 /PRNewswire/ -- ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $47 billion for the month of November, down 0.6 percent from a year ago.

ALG expects a loss of $284 million in revenue for automakers versus 2017. Additionally, incentive spending is projected to decline 3.4 percent year over year.

"Consumers continue to pay near record amounts for new vehicles, despite the headwinds of stock market volatility and rising interest rates," said Eric Lyman, ALG's chief industry analyst. "2018 was expected to be a year of transition with regards to sales, ATPs and incentive spending, instead we've seen automakers making all the right moves to sustain transaction prices and decrease incentives while maintaining a robust 17M annual sales rate."

ALG estimates ATP for a new light vehicle was $34,438 in November, up 1.7 percent from a year ago. Average incentive spending per unit declined by $131 to $3,672. The ratio of incentive spending to ATP is expected to be 10.7 percent, down from 11.2 percent from a year ago.

Average Transaction Price (ATP)

Manufacturer	November 2018 Forecast	November 2017	October 2018	YOY	MOM
BMW (BMW, Mini)	$53,361	$51,991	$51,841	2.6%	2.9%
Daimler (Mercedes-Benz, Smart)	$63,082	$61,345	$58,245	2.8%	8.3%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	$35,424	$34,208	$35,079	3.6%	1.0%
Ford (Ford, Lincoln)	$38,282	$36,922	$38,032	3.7%	0.7%
GM (Buick, Cadillac, Chevrolet, GMC)	$38,041	$37,784	$37,369	0.7%	1.8%
Honda (Acura, Honda)	$28,734	$28,192	$29,028	1.9%	-1.0%
Hyundai	$22,504	$22,308	$22,452	0.9%	0.2%
Kia	$22,643	$21,960	$22,601	3.1%	0.2%
Nissan (Nissan, Infiniti)	$27,870	$27,795	$27,922	0.3%	-0.2%
Subaru	$29,142	$27,994	$29,360	4.1%	-0.7%
Toyota (Lexus, Scion, Toyota)	$32,434	$32,451	$32,558	-0.1%	-0.4%
Volkswagen (Audi, Porsche, Volkswagen)	$36,629	$36,629	$34,724	0.0%	5.5%
Industry	$34,438	$33,871	$34,093	1.7%	1.0%

Incentive per Unit Spending

Manufacturer	November 2018 Forecast	November 2017	October 2018	YOY	MOM
BMW (BMW, Mini)	$5,479	$5,397	$5,568	1.5%	-1.6%
Daimler (Mercedes-Benz, Smart)	$5,627	$5,186	$5,806	8.5%	-3.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	$4,379	$4,226	$4,352	3.6%	0.6%
Ford (Ford, Lincoln)	$4,461	$4,667	$4,374	-4.4%	2.0%
GM (Buick, Cadillac, Chevrolet, GMC)	$4,442	$4,770	$4,229	-6.9%	5.0%
Honda (Acura, Honda)	$2,023	$1,954	$1,965	3.5%	3.0%
Hyundai	$2,710	$3,147	$2,669	-13.9%	1.6%
Kia	$3,725	$3,439	$3,749	8.3%	-0.6%
Nissan (Nissan, Infiniti)	$4,329	$4,372	$4,326	-1.0%	0.1%
Subaru	$1,141	$1,242	$1,165	-8.1%	-2.0%
Toyota (Lexus, Scion, Toyota)	$2,565	$2,784	$2,495	-7.9%	2.8%
Volkswagen (Audi, Porsche, Volkswagen)	$3,800	$3,806	$3,789	-0.2%	0.3%
Industry	$3,672	$3,803	$3,617	-3.4%	1.5%

Incentive Spending as a Percentage of ATP

Manufacturer	November 2018 Forecast	November 2017	October 2018	YOY	MOM
BMW (BMW, Mini)	10.3%	10.4%	10.7%	-1.1%	-4.4%
Daimler (Mercedes-Benz, Smart)	8.9%	8.5%	10.0%	5.5%	-10.5%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	12.4%	12.4%	12.4%	0.1%	-0.4%
Ford (Ford, Lincoln)	11.7%	12.6%	11.5%	-7.8%	1.3%
GM (Buick, Cadillac, Chevrolet, GMC)	11.7%	12.6%	11.3%	-7.5%	3.2%
Honda (Acura, Honda)	7.0%	6.9%	6.8%	1.5%	4.0%
Hyundai	12.0%	14.1%	11.9%	-14.6%	1.3%
Kia	16.5%	15.7%	16.6%	5.1%	-0.8%
Nissan (Nissan, Infiniti)	15.5%	15.7%	15.5%	-1.3%	0.3%
Subaru	3.9%	4.4%	4.0%	-11.7%	-1.3%
Toyota (Lexus, Scion, Toyota)	7.9%	8.6%	7.7%	-7.8%	3.2%
Volkswagen (Audi, Porsche, Volkswagen)	10.4%	10.4%	10.9%	-0.2%	-4.9%
Industry	10.7%	11.2%	10.6%	-5.0%	0.5%

(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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SOURCE ALG