Tag Archive | "Kelley Blue Book"

Average New-Vehicle Transaction Price Reaches $33,781, KBB Reports


IRVINE, Calif. — The estimated average transaction price for a new car reached $33,781 in February, a 2.2% increase from the prior year, according to Kelley Blue Book.

The vehicle information site attributed the rise to low gas prices pushing more consumers toward more expensive pickup trucks, and vehicle OEMs are responding by increasing incentives spending.

“Increased incentives are helping offset part of this growth, as incentive spend is nearing pre-recession levels in recent months,” said Tim Fleming, analyst for Kelley Blue Book. “Low gas prices are attracting consumers toward pickup trucks, with average transaction up a combined 6% for the segment. The same growth has not been seen in traditional car segments like compact and mid-size cars, which are both up 0.5 %, or around $100.”

Utility and truck models helped propel Toyota Motor Co., Fiat-Chrysler, General Motors and Ford Motor Co. to some of the highest transaction prices during the month. The release of the all-new Honda Civic and a well-performing Honda Pilot helped increase the average vehicle transaction price for American Honda by 0.5% year-over-year.

Hyundai-Kia was the only brand to see a year-over-year decline in average transaction price. The brand’s $24,577 average transaction price was down 1.6% from the year-ago period. Although the Tucson had its best month for the brand, dealers sold down the outgoing Elantra model during the month.

The month’s highest average vehicle transaction price was recorded by General Motors at $37,765.

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KBB, Autotrader Report Strong November Unit Sales


IRVINE, Calif., and ATLANTA — Autotrader and Kelley Blue Book reported stronger-than-expected auto sales during the month of November. The overall industry health is looking strong; however, there are a few risk factors that are worth paying attention to heading into 2016, analysts said.

The stronger-than-expected unit sales during November were driven by higher employment rates, a recovering economy, cheap gas prices, cheap credit, and successful year-end promotions, analysts noted.

“I think the holiday and Black Friday promotions generally resonated with consumers and we’ll see that trend continue through December,” said Michelle Krebs, senior analyst for Autotrader. “A notable exception that didn’t’ really resonate with consumers so much was the Ford Friends and Neighbors campaign.”

Ford has since canceled the campaign and plans to replace it with a more conventional year-end incentive. Krebs explained that while the campaign increased showroom traffic, not enough of that traffic translated into sales. Dealers told Autotrader that many customers who were aware of Ford’s Friends and Neighbors campaign thought they could do better looking elsewhere.

Autotrader and Kelley Blue Book’s original forecast predicted a SAAR of 17.8 million units after November. Most major manufacturers that have reported November sales put the SAAR at 18 million units, with the possibility of the SAAR reaching 18.2 million. That depends on the performance of manufacturers that had yet to report November sales, they told the two firms.

“Usual suspects continue to do very well,” said Alec Gutierrez, senior analyst for Kelley Blue Book. “As far as the industry is concerned, month over month, very similar trends in terms of what segments are doing well: trucks and SUVs.”

Nissan was up 4% from last year, while GM and Ford came in under their forecasts. The two domestics did report solid truck and SUV sales, however. An increase in incentives was responsible for the 20% sales increase realized by the Jeep brand, according to analysts.

While great for moving vehicles, the trend of rising incentives outpacing rising transaction prices was one of the risk factors identified by KBB’s Guiterrez. “In fact, while we did see a year-over-year increase in terms of what consumers are paying for new cars at the dealership, we have seen that growth start to slow,” Gutierrez noted. “Typically, we see 2-3% growth in transaction prices, but in November, that growth was coming in at less than 1%, so some stabilization happening there.”

While transaction price growth seems to be halting, incentives seem to be increasing. For the past four months, industry-wide incentives have averaged around $3,100, Krebs said.

“That’s the highest we’ve seen since prerecession,” said Krebs. “More importantly, the incentives are taking a bigger share of the average transaction price … the average transaction prices are increasing, but not at the torrid pace they were.”

Krebs also pointed to rising interest rates as another risk factor, saying the firm expects the Federal Reserve to increase interest rates later this week. While the increase will likely add only a couple of extra dollars to the typical car loan, it could have a major impact on other household loans. And that could push potential car buyers out of the market, she said.

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New-Vehicle Transaction Prices Rise More Than 1% in October


IRVINE, Calif. — Kelley Blue Book reported today that the estimated average new-vehicle transaction price for light vehicles was $34,023 in October, with new-vehicle prices rising $458 from a year ago and $233 from September.

Leading the way were full-size SUVs, high-performance cars, mid-size trucks and vans, the vehicle information site noted. By brand, Chevrolet, Hyundai, Lincoln, Ram and Subaru lead the way in terms of month-over-month and year-over-year price gains.

“These brands had growth from different segments across their lineups, a promising sign given the increasing popularity of SUVs and trucks in the market,” said Akshay Anand, a Kelley Blue Book analyst.

One of the few brands to show a dip in average transaction prices from the prior month (down 3.6 percent) and on a year-over-year basis (down 1.8 percent) was Volkswagen. “In fact, Volkswagen had the largest month-over-month drop as the diesel emissions issue continues to impact the automaker,” said Anand. “Six out of the eight vehicles within its lineup were down from last month, while only the Golf is up from this time last year, potentially reflecting Volkswagen’s need to offer its vehicles at slightly lower prices since consumer perceptions of the brand may be impacted.”

As a whole, Volkswagen Group is down 1.6 percent from September 2015, but up 2.9 percent from last year.

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KBB Predicts 12% Increase in New-Vehicle Sales


IRVINE, Calif. — Kelley Blue Book said this week it expects new-vehicle sales to increase nearly 12% year over year to a total of 1.43 million units in October, a predication that would put the seasonally adjusted annual rate at 197.9 million if realized. It would also be the highest October sales total since 2001.

Fueling the vehicle information site’s double-digit growth prediction is new-vehicle sales continue to roll off dealer lots after the industry experienced its strongest sales month in over a decade in September. Employment and fuel prices are other drivers of KBB’s prediction.

“Key economic indicators for auto sales are still strong, including jobless claims at a historic low as the national unemployment rate approaches 5%, fuel pricing nearing six-year lows, and interest rates that remain near zero,” said Alec Gutierrez, senior analyst for Kelley Blue Book. “This momentum has pushed Kelley Blue Book’s forecast to 17.4 million for 2015, a 5.6% year-over-year improvement.”

Sales Volume 

Market Share 2

Manufacturer

Oct-15

Oct-14

YOY %

Oct-15

Oct-14

YOY %

General Motors (Buick, Cadillac, Chevrolet, GMC)

250,000

226,819

10.2%

17.5%

17.8%

-0.3%

Ford Motor Company (Ford, Lincoln)

219,000

187,897

16.6%

15.3%

14.7%

0.6%

Toyota Motor Company (Lexus, Scion, Toyota)

198,000

180,580

9.6%

13.8%

14.1%

-0.3%

Fiat Chrysler (Chrysler, Dodge, FIAT, Jeep, RAM)

191,000

170,480

12.0%

13.4%

13.3%

0.0%

American Honda (Acura, Honda)

135,000

121,172

11.4%

9.4%

9.5%

0.0%

Nissan North America (Infiniti, Nissan)

120,000

103,117

16.4%

8.4%

8.1%

0.3%

Hyundai-Kia

110,000

94,775

16.1%

7.7%

7.4%

0.3%

Volkswagen Group (Audi, Volkswagen, Porsche)

50,000

49,130

1.8%

3.5%

3.8%

-0.3%

Total 3

1,430,000

1,277,821

11.9%

Historical data from OEM sales announcements

While General Motors is expected to lead the way in sales volume, Ford Motor Co.’s expected 16.6% increase in new-vehicle sales from a year ago would be the biggest gain in October. Expected to lead the way, according to KBB, is the F-150, which is pushing overall F-Series volume to new levels of growth this year. Ford’s refreshed Explorer should also be a solid driver of growth this year for the automaker.

The Volkswagen Group is also expected to show a slight gain in sales volume, despite its recent troubles, the site noted. “With most brands experiencing growth this month, Volkswagen Group should report fairly even sales totals in the wake of their diesel emissions issue,” said Gutierrez. “Audi and Porsche will be driving the sales growth for the manufacturer, as the Volkswagen brand posts negative figures, largely due to the stop-sale of its diesel models, which previously made up nearly 20 percent of the brand’s sales volume.”

By vehicle segment, compact utility vehicles are expected to lead the way for the third month in a row with nearly 40% growth. This segment has seen five new models enter the segment in the past year, which has resulted in more than 20,000 units sold per month. Still, the rest of the segment continues to strengthen at double the rest of the industry’s pace.

With low fuel prices and exploding popularity of small utilities, small and mid-size cars will continue to lose market share in October. These are already two of the most competitive segments in the market, and year-to-date sales in both segments have declined. While Kelley Blue Book said it expects an increase in volume in October, due to strong overall sales momentum in the automotive industry, it also believes market share will drop by more than a full percentage point for these car segments.

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Kelley Blue Book Adds Self-Service Portal for Mass Vehicle Valuations


IRVINE, Calif. — Kelley Blue Book now offers its customers a new self-service interface for easy access to new and used-car Kelley Blue Book Values and configuration data by vehicle identification number (VIN) within its suite of business-to-business solutions.

Kelley Blue Book Values incorporate more than 250 sources. Using flexible file formats, customers can quickly obtain current vehicle valuations in real time by simply inputting the desired batch VIN information using a Web-based interface.

“The latest addition to Kelley Blue Book’s suite of industry solutions gives customers easy access to useful VIN-specific data and timely, relevant new and used-vehicle valuations on their own time,” said Dan Ingle, vice president of valuations and industry solutions for Kelley Blue Book. “Leveraging Kelley Blue Book’s nearly 90 years of automotive expertise, providing trusted values, unparalleled data and integration tools for both new and used vehicles, we continue our mission to be a vital resource for our customers.”

All VIN-related information is obtained from factory data, and includes manufacturer order codes. Kelley Blue Book also provides all associated VIN trims, if more than one is identified from the decoding process.

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Spending on New Cars Hits All-Time High, Even as Loans Stretch to Record Lengths


While May might not have brought the big uptick in sales we’ve seen in recent months, preliminary data suggest that automakers took in record revenues, with the average transaction price of new cars, trucks and crossovers sold last month climbing by at least 4%, reports The Detroit Bureau. 

All told, U.S. buyers spent a record $52 billion for their new vehicles in May, in part, due to a sharp, year-over-year decline in incentives, according to several firms that track monthly sales data. A separate study suggested that motorists are covering those higher costs by stretching their loans out longer than the industry has ever seen, an average 67 months.

“New vehicle sector and segment preference indicates consumers are confident about the economy and their finances,” said TrueCar President John Krafcik. “Not only are these shifts to premium brands and utilities telling from an economic indicator standpoint, they signal sizable revenue gains automakers should reap this year.”

The data tracking firm estimated that the typical vehicle had an average transaction price, or ATP, of $32,452, up 4% rom May 2014. Lower incentives played a role, but manufacturers have also seen buyers show more confidence by loading up on options and by trading up to higher-level vehicles. TrueCar estimated sales of premium brands jumped 10.6% during the first four months of 2015 compared to just 4.8% for mainstream brands.

BMW and its Mini subsidiary, saw prices jump in May by 6.5%, according to a separate analysis by Kelley Blue Book. Mazda saw a similar increase, while Ford and General Motors prices climbed a more modest 4.3% and 4.2% respectively. Toyota’s average price rose just 2.3%, even though it trimmed incentives by more than 10%, year-over-year.

With only a handful of exceptions, notably including General Motors, Hyundai and Kia, most makers trimmed rebates and givebacks as the U.S. auto market continued to gain ground. And analysts noted that the modest overall sales numbers for May actually misrepresent the market’s momentum, as the peculiarities of the industry’s reporting system counted fewer so-called “sales days” last month than in May 2014.

The surge in spending also reflects a year-long shift from fuel-efficient small cars and alternative-power vehicles to larger passenger cars, pickups and SUVs.

“With the national average price of gasoline down nearly a dollar per gallon on average from one year ago, truck and SUV demand remains strong, elevating average transaction prices,” Karl Brauer, senior analyst for Kelley Blue Book, said in a statement.

The steady climb in new car prices might come as a surprise to those worried about relatively stagnant middle-class earnings and the rising wealth gap. In reality, most new car buyers today register on the upper end of the middle-class spectrum. Even for compact cars, industry research often shows household income levels approaching six figures.

And buyers are simply stretching out their purchases to hold down monthly payments – while also encouraged by continuing low interest rates. Gone are the days of three and even four-year loans. Borrowers extended their loans terms during the previous quarter to 67 months on average, longer than ever for new cars, according to Experian Automotive.

“While longer term loans are growing, they do not necessarily represent an ominous sign for the market,” said Melinda Zabritski, Experian’s senior director of automotive finance.

On the plus side, the trend allows consumers to buy more vehicle without busting the household budget. On the downside, however, it means they likely have to keep those vehicles longer in order to avoid being upside-down on loans when trading in, cautioned Zabritski. That could foretell slower future growth of the automotive market.

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