ALG finds January sales and ATPs suggest a healthy start to 2018, despite continued elevated incentive spending

Average transaction prices likely to rise 1.9 percent

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Feb 01, 2018, 07:00 ET

SANTA MONICA, Calif., Feb. 1, 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 $39 billion for the month of January, up 2.4 percent from a year ago.

ALG expects a gain of $907 million in revenue for automakers versus January 2017. Additionally, incentive spending is projected to increase 9.8 percent year over year.

"Average Transaction Prices continue to show gains, validating ALG's outlook for a strong and healthy retail automotive landscape in 2018," said Eric Lyman, ALG's chief industry analyst. "The month over month drop is expected, given the higher share of luxury vehicles in December, but the increase in ATP over last January indicates sustained consumer demand. However, incentives continue to be a struggle, with automakers once again eclipsing the 11 percent mark in incentive spending as a percentage of ATP."

ALG estimates ATP for a new light vehicle was $33,540 in January, up 1.9 percent from a year ago. Average incentive spending per unit grew by $340 to $3,812. The ratio of incentive spending to ATP is expected to be 11.4 percent, up 7.8 percent from a year ago.

Average Transaction Price (ATP)

Manufacturer	Jan. 2018 Forecast	Jan. 2017	Dec. 2017	YOY	MOM
BMW (BMW, Mini)	$51,894	$50,569	$51,654	2.6%	0.5%
Daimler (Mercedes-Benz, Smart)	$62,182	$58,389	$59,866	6.5%	3.9%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	$34,468	$33,190	$34,252	3.9%	0.6%
Ford (Ford, Lincoln)	$37,609	$36,373	$37,909	3.4%	-0.8%
GM (Buick, Cadillac, Chevrolet, GMC)	$36,469	$36,379	$37,956	0.2%	-3.9%
Honda (Acura, Honda)	$27,997	$27,331	$28,556	2.4%	-2.0%
Hyundai	$22,458	$23,379	$22,535	-3.9%	-0.3%
Kia	$23,091	$22,663	$22,785	1.9%	1.3%
Nissan (Nissan, Infiniti)	$27,503	$27,594	$28,176	-0.3%	-2.4%
Subaru	$27,697	$27,870	$27,904	-0.6%	-0.7%
Toyota (Lexus, Scion, Toyota)	$31,801	$31,563	$32,668	0.8%	-2.7%
Volkswagen (Audi, Porsche, Volkswagen)	$34,583	$32,905	$34,064	5.1%	1.5%
Industry	$33,540	$32,916	$34,276	1.9%	-2.1%

Incentive per Unit Spending

Manufacturer	Jan. 2018 Forecast	Jan. 2017	Dec. 2017	YOY	MOM
BMW (BMW, Mini)	$4,766	$4,032	$5,349	18.2%	-10.9%
Daimler (Mercedes-Benz, Smart)	$4,949	$4,465	$5,174	10.8%	-4.4%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	$4,379	$4,219	$4,336	3.8%	1.0%
Ford (Ford, Lincoln)	$4,421	$4,144	$4,431	6.7%	-0.2%
GM (Buick, Cadillac, Chevrolet, GMC)	$5,242	$4,587	$5,548	14.3%	-5.5%
Honda (Acura, Honda)	$2,063	$2,095	$2,087	-1.5%	-1.2%
Hyundai	$3,047	$2,176	$3,097	40.0%	-1.6%
Kia	$3,413	$3,366	$3,447	1.4%	-1.0%
Nissan (Nissan, Infiniti)	$4,370	$3,993	$4,572	9.4%	-4.4%
Subaru	$1,284	$966	$1,257	32.9%	2.1%
Toyota (Lexus, Scion, Toyota)	$2,430	$2,212	$2,778	9.8%	-12.5%
Volkswagen (Audi, Porsche, Volkswagen)	$3,617	$3,418	$3,774	5.8%	-4.2%
Industry	$3,812	$3,472	$3,968	9.8%	-3.9%

Incentive Spending as a Percentage of ATP

Manufacturer	Jan. 2018 Forecast	Jan. 2017	Dec. 2017	YOY	MOM
BMW (BMW, Mini)	9.2%	8.0%	10.4%	15.2%	-11.3%
Daimler (Mercedes-Benz, Smart)	8.0%	7.6%	8.6%	4.1%	-7.9%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	12.7%	12.7%	12.7%	-0.1%	0.3%
Ford (Ford, Lincoln)	11.8%	11.4%	11.7%	3.2%	0.6%
GM (Buick, Cadillac, Chevrolet, GMC)	14.4%	12.6%	14.6%	14.0%	-1.7%
Honda (Acura, Honda)	7.4%	7.7%	7.3%	-3.9%	0.8%
Hyundai	13.6%	9.3%	13.7%	45.8%	-1.3%
Kia	14.8%	14.9%	15.1%	-0.5%	-2.3%
Nissan (Nissan, Infiniti)	15.9%	14.5%	16.2%	9.8%	-2.1%
Subaru	4.6%	3.5%	4.5%	33.7%	2.9%
Toyota (Lexus, Scion, Toyota)	7.6%	7.0%	8.5%	9.0%	-10.2%
Volkswagen (Audi, Porsche, Volkswagen)	10.5%	10.4%	11.1%	0.7%	-5.6%
Industry	11.4%	10.5%	11.6%	7.8%	-1.8%

(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.

SOURCE ALG