Auto industry finding its footing with Average Transaction Prices up and Incentive spending down versus prior month

Average transaction prices expected to rise 0.9 percent

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Nov 01, 2017, 07:00 ET

SANTA MONICA, Calif., Nov. 1, 2017 /PRNewswire/ -- ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $45 billion for the month of October, down 0.7 percent from a year ago.

ALG expects a loss of $294 million in revenue for automakers versus October 2016. Additionally, incentive spending is projected to increase 8.4 percent.

"ATP experienced substantial growth in October, fueled by light trucks and a richer mix of new 2018 model year vehicles," said Eric Lyman, ALG's Chief Industry Analyst. "ALG also expects the industry to begin pulling back on incentive spending thanks to much needed production cuts across major automakers."

ALG estimates ATP for a new light vehicle was $33,226 in October, up 0.9 percent from a year ago. Average incentive spending per unit grew by $295 to $3,820 on a year over year basis. The ratio of incentive spending to ATP is expected to be 11.5 percent, up from 10.7 percent a year ago.

Average Transaction Price (ATP)

Manufacturer	Oct. 2017 Forecast	Oct. 2016	Sep. 2017	YOY	MOM
BMW (BMW, Mini)	$52,912	$50,392	$52,330	5.0%	1.1%
Daimler (Mercedes-Benz, Smart)	$62,444	$58,359	$58,697	7.0%	6.4%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	$33,808	$33,016	$33,335	2.4%	1.4%
Ford (Ford, Lincoln)	$35,981	$35,625	$35,514	1.0%	1.3%
GM (Buick, Cadillac, Chevrolet, GMC)	$36,865	$36,828	$36,054	0.1%	2.2%
Honda (Acura, Honda)	$27,333	$27,116	$27,278	0.8%	0.2%
Hyundai	$22,765	$22,607	$22,788	0.7%	-0.1%
Kia	$21,817	$22,445	$21,839	-2.8%	-0.1%
Nissan (Nissan, Infiniti)	$27,042	$28,023	$27,448	-3.5%	-1.5%
Subaru	$28,094	$28,151	$28,122	-0.2%	-0.1%
Toyota (Lexus, Scion, Toyota)	$31,707	$31,581	$31,010	0.4%	2.2%
Volkswagen (Audi, Porsche, Volkswagen)	$36,265	$35,381	$34,633	2.5%	4.7%
Industry	$33,226	$32,929	$32,657	0.9%	1.7%

Incentive per Unit Spending

Manufacturer	Oct. 2017 Forecast	Oct. 2016	Sep. 2017	YOY	MOM
BMW (BMW, Mini)	$5,028	$6,472	$5,273	-22.3%	-4.6%
Daimler (Mercedes-Benz, Smart)	$4,882	$4,770	$5,002	2.3%	-2.4%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	$4,631	$4,185	$4,635	10.7%	-0.1%
Ford (Ford, Lincoln)	$4,443	$4,060	$4,473	9.4%	-0.7%
GM (Buick, Cadillac, Chevrolet, GMC)	$5,105	$4,456	$5,215	14.6%	-2.1%
Honda (Acura, Honda)	$2,023	$1,899	$1,958	6.5%	3.3%
Hyundai	$2,802	$2,467	$2,843	13.6%	-1.4%
Kia	$3,915	$3,133	$3,883	25.0%	0.8%
Nissan (Nissan, Infiniti)	$4,428	$4,236	$4,471	4.5%	-1.0%
Subaru	$1,084	$1,097	$1,077	-1.2%	0.6%
Toyota (Lexus, Scion, Toyota)	$2,684	$2,429	$2,783	10.5%	-3.6%
Volkswagen (Audi, Porsche, Volkswagen)	$3,597	$3,855	$3,657	-6.7%	-1.7%
Industry	$3,820	$3,525	$3,885	8.4%	-1.7%

Incentive Spending as a Percentage of ATP

Manufacturer	Oct. 2017 Forecast	Oct. 2016	Sep. 2017	YOY	MOM
BMW (BMW, Mini)	9.5%	12.8%	10.1%	-26.0%	-5.7%
Daimler (Mercedes-Benz, Smart)	7.8%	8.2%	8.5%	-4.4%	-8.3%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)	13.7%	12.7%	13.9%	8.1%	-1.5%
Ford (Ford, Lincoln)	12.3%	11.4%	12.6%	8.3%	-1.9%
GM (Buick, Cadillac, Chevrolet, GMC)	13.8%	12.1%	14.5%	14.4%	-4.3%
Honda (Acura, Honda)	7.4%	7.0%	7.2%	5.6%	3.1%
Hyundai	12.3%	10.9%	12.5%	12.8%	-1.3%
Kia	17.9%	14.0%	17.8%	28.6%	0.9%
Nissan (Nissan, Infiniti)	16.4%	15.1%	16.3%	8.3%	0.5%
Subaru	3.9%	3.9%	3.8%	-1.0%	0.7%
Toyota (Lexus, Scion, Toyota)	8.5%	7.7%	9.0%	10.0%	-5.7%
Volkswagen (Audi, Porsche, Volkswagen)	9.9%	10.9%	10.6%	-9.0%	-6.1%
Industry	11.5%	10.7%	11.9%	7.4%	-3.4%

(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