Tag Archive | "new vehicle sales"

KBB: Average New-Vehicle Prices Rise to Record High in December


IRVINE, Calif. — Average transaction prices closed the year on a strong note, rising nearly 2% in December to a record high of $36,113, Kelley Blue Book (KBB) reported last week.

The increase from the year-ago average was actually 1.6%, or $583. Compared to November, December’s average transaction price was up $66, or 0.2%.

“Incentive spending was a concern in 2017, averaging 10.4% of MSRP, but, encouragingly, this figure held relatively flat over the final quarter of the year,” said KBB analyst Tim Fleming. “In 2018, interest rate hikes could be another concern, as they threaten to increase monthly payments for consumers; however, Kelley Blue Book anticipates they will help contribute to another down year of new-vehicle sales more than impact prices, which have steadily risen along with the economy since the recession.”

Transaction prices for all of 2017 also finished 2% higher than last year. However, the growth was slightly slower than the growth rate recorded in 2015 and 2016, which was at 2.5%.

American Honda’s transaction prices rose nearly 3% in December 2017, with the Honda brand up 4% and Acura flat. The CR-V, Honda’s top seller, continued its strong run with prices up 6%. In addition, the redesigned Honda Odyssey showed the most improvement, rising 14% to top the minivan segment.

Volkswagen Group saw the biggest jump among the major manufacturers, with average prices up 8%. The Volkswagen brand climbed 9%, thanks to its new SUVs, the Atlas and Tiguan, which also are gaining momentum. Porsche climbed 5% on the strength of its new Panamera. Audi was up 4%, with the redesigned A5 and Q5 each rising 10%.

Posted in Auto Industry NewsComments Off on KBB: Average New-Vehicle Prices Rise to Record High in December

KBB: Average New-Vehicle Prices Rise to Record High in December


IRVINE, Calif. — Average transaction prices closed the year on a strong note, rising nearly 2% in December to a record high of $36,113, Kelley Blue Book (KBB) reported last week.

The increase from the year-ago average was actually 1.6%, or $583. Compared to November, December’s average transaction price was up $66, or 0.2%.

“Incentive spending was a concern in 2017, averaging 10.4% of MSRP, but, encouragingly, this figure held relatively flat over the final quarter of the year,” said KBB analyst Tim Fleming. “In 2018, interest rate hikes could be another concern, as they threaten to increase monthly payments for consumers; however, Kelley Blue Book anticipates they will help contribute to another down year of new-vehicle sales more than impact prices, which have steadily risen along with the economy since the recession.”

Transaction prices for all of 2017 also finished 2% higher than last year. However, the growth was slightly slower than the growth rate recorded in 2015 and 2016, which was at 2.5%.

American Honda’s transaction prices rose nearly 3% in December 2017, with the Honda brand up 4% and Acura flat. The CR-V, Honda’s top seller, continued its strong run with prices up 6%. In addition, the redesigned Honda Odyssey showed the most improvement, rising 14% to top the minivan segment.

Volkswagen Group saw the biggest jump among the major manufacturers, with average prices up 8%. The Volkswagen brand climbed 9%, thanks to its new SUVs, the Atlas and Tiguan, which also are gaining momentum. Porsche climbed 5% on the strength of its new Panamera. Audi was up 4%, with the redesigned A5 and Q5 each rising 10%.

Posted in Auto Industry NewsComments Off on KBB: Average New-Vehicle Prices Rise to Record High in December

KBB: Flat Prices, Higher Incentive Spending Signals Headwinds for New-Car Market


IRVINE, Calif. — Transaction prices continue to rise at a slower pace, with October’s estimated average transaction price expected to rise by $101 from a year ago to $35,263, Kelley Blue Book (KBB) reported on Tuesday. Compared to September, the firm expects the average to increase by $128, or 0.4%.

“Prices in the third quarter were up just 1% after averaging 3% gains in the first half of the year,” said KBB analyst Tim Fleming. “While Kelley Blue Book expects solid sales in October 2017 at 17.9 million SAAR, flat transaction prices combined with ever-growing incentive spending signal headwinds for the new-vehicle market as 2017 nears its end.”

Expected to register the highest year-over-year increase is Fiat Chrysler, with the automaker’s average transaction price on pace to rise 4% from a year ago. The Jeep brand is expected to record a 3% increase in its average, with the redesigned Jeep Compass expected to show a 6% increase in its average.

The firm noted that the wind down of the Jeep Patriot also is helping to drive up average transaction prices for the Jeep brand.

Dodge’s average is expected to climb by 10% from a year ago on the strength of the Durango SUV and its new SRT performance trim, KBB noted.

Volkswagen Group’s average transaction prices are also expected to be among the best performers on a year-over-year basis, rising 2% for the month. The Volkswagen brand alone is expected to show a 4% increase in its average transaction price, thanks, in part, to the recently introduced Atlas SUV and redesigned Tiguan (expected to be up 6%).

The firm said it expects Audi to show a 4% increase in its average transaction price, with the redesigned A5 expected to show a 4% increase on the strength of its new Sportback body style.

Posted in Auto Industry NewsComments (0)

Business Leaders Cautiously Optimistic About Trump, Economic, Auto Sales


ALPHARETTA, Ga. — Twenty senior industry leaders expressed cautious optimism about the economy and the automotive retail industry in White Clarke Group’s annual U.S. Auto and Equipment Survey.

The chief executive officers, directors, chairmen and president surveyed by the technology firm were optimistic about new-vehicle sales, which are on the decline but should remain among the highest on record in 2017. What has them cautious is President Donald Trump, whose communication style has them wondering if his administration can deliver on its pro-business campaign promises.

“As a result, business is falling back into cautious and hesitant state,” said Pacific Rim Capital CEO David Mirsky, noting the economic outlook was favorable following the November election. “The coarseness of our President’s communication style hasn’t helped. Even though most businesses agree with a lot of what Mr. Trump wants to do, we don’t like the way he has operated so far.”

According to the National Automobile Dealers Association, new-vehicle sales should end the year at 17.1 million units. During the first six months of 2017, the report noted, 8.4 million new cars and light trucks were sold. That’s down 2.2% from the year-ago period. Despite the decline in vehicle purchases, economic experts remain optimistic about the market.

One of the reasons is the $1.1 trillion auto finance market, which has fueled the industry’s rebound from the financial crash and recession of 2008-2009. Since then, U.S. light vehicle sales have delivered seven consecutive annual gains — the longest upward streak in decades, with sales peaking at 17.55 million new-vehicle registrations in 2016.

The concern, however, is affordability. According to Experian, the average finance amount for a new vehicle reached a record $30,621 in 2016, while the average finance amount for used also achieved new peaks at $19,329 per car. And in order to lower monthly payments, consumers are extending loan terms. In the fourth quarter of 2016, for instance, the 73- to 84-month term band rose 29% from the prior-year period.

“With the average loan amount for new and used vehicles hitting all-time highs, we are seeing the need for affordability drive consumer purchasing behavior,” said Melinda Zabritski, senior director of automotive finance for Experian Automotive. “Our latest research shows an $11,000 gap between the average loan amount on a new and used vehicle — the widest we have ever seen.”

Then there are hurricanes Harvey and Irma, which market analysts are still assessing but are believed to have damaged up to 1 million vehicles — 300,000 to 500,000 in the Houston area alone. This, analysts said in the report, could lead to a substantial increase in demand for new vehicles. It may also help with the oversupply problem in the used-vehicle space, which remains robust.

As for the U.S. economy, the report noted it grew at an annualized rate of 2.6% during the second quarter, with some financial institutions, such as Goldman Sachs, estimating it grew 3%. On the global stage, the International Monetary Fund and the Organization for Economic Cooperation and Development predicted that the global economy will expand by 3.5% this year.

The report also looked at regulatory threats, specifically those posed by the Consumer Financial Protection Bureau. Since opening its doors in 2011, the regulator, which oversees banks, credit card companies, and lenders, has returned about $12 billion in restitution to almost 30 million Americans. If Trump delivers on his promise of less regulation, however, the bureau faces a reduced role in 2018, the report noted.

The report touched on several other topics, including the impact of mobility on ownership models, the equipment finance market, new technology, and the impact of rising interest rates. However, most economic outlooks seemed to rest on the ability of a Republican White House and Republican Congress to deliver on their pro-business promises.

“It’s becoming clearer now that there is dysfunction in the White House and the Republican Party is fractured, so all early attempts to pass meaningful economic legislation have failed,” said Adam Warner, president of Key Equipment Finance. “Business confidence has eroded and will likely continue to be challenged in 2018.”

Posted in Auto Industry NewsComments Off on Business Leaders Cautiously Optimistic About Trump, Economic, Auto Sales

S&P/Experian: Auto Default Rate Registers Largest Increase Since December 2011


NEW YORK — Auto loan defaults in increased nine basis points from July to August, the largest month-over-month increase since December 2011, according to the S&P/Experian Consumer Credit Default Indices.

Despite the drop, the auto loan default rate remains low relative to historical levels. In fact, the rate is closer to levels recorded one year ago. The same is true for the composite rate for overall consumer defaults and first mortgage defaults, both of which increased three basis points from July.

“Overall, consumer credit defaults show no reason for alarm,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Defaults on first mortgages are flat to down while defaults on auto loans have risen slightly in recent months. Consumer credit defaults on bank cards continue their upward creep since the end of 2015 despite a recent drop. The combination of an improving labor market, low inflation, and low interest rates are the principal factors behind currently favorable consumer credit conditions.”

The bank card default rate fell 12 basis points from July to 3.19% — the lowest level since December 2016. Bank cards were the only loan type to register a decrease in August.

Out of the five major cities analyzed by S&P/Experian, three registered increases in their default rates in August. New York recorded the largest increase, up 13 basis points from July to 0.95%. Los Angeles reported a rate of 0.66% for August, up three basis points from the previous month. Chicago came in at 0.94%, up four basis points from July.

Dallas reported a decrease of three basis points from the previous month to 0.74%, while Miami’s rate fell 10 basis points from July to 1.13%.

“Some future developments could affect consumer credit defaults: Auto sales have fallen since December 2016 and are down 11%. Declining auto sales and the normal end-of-model year push to make room for new cars may encourage easier credit conditions and raise concerns about future defaults,” Blitzer noted. “Hurricane damage in Houston and across Florida is creating substantial financial stress. The impact on mortgages on damaged or destroyed homes is not yet clear. Job losses and rising spending needs could lead to increased consumer credit defaults in coming months.”

Posted in Auto Industry NewsComments Off on S&P/Experian: Auto Default Rate Registers Largest Increase Since December 2011

S&P/Experian: Auto Default Rate Registers Largest Increase Since December 2011


NEW YORK — Auto loan defaults in increased nine basis points from July to August, the largest month-over-month increase since December 2011, according to the S&P/Experian Consumer Credit Default Indices.

Despite the drop, the auto loan default rate remains low relative to historical levels. In fact, the rate is closer to levels recorded one year ago. The same is true for the composite rate for overall consumer defaults and first mortgage defaults, both of which increased three basis points from July.

“Overall, consumer credit defaults show no reason for alarm,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Defaults on first mortgages are flat to down while defaults on auto loans have risen slightly in recent months. Consumer credit defaults on bank cards continue their upward creep since the end of 2015 despite a recent drop. The combination of an improving labor market, low inflation, and low interest rates are the principal factors behind currently favorable consumer credit conditions.”

The bank card default rate fell 12 basis points from July to 3.19% — the lowest level since December 2016. Bank cards were the only loan type to register a decrease in August.

Out of the five major cities analyzed by S&P/Experian, three registered increases in their default rates in August. New York recorded the largest increase, up 13 basis points from July to 0.95%. Los Angeles reported a rate of 0.66% for August, up three basis points from the previous month. Chicago came in at 0.94%, up four basis points from July.

Dallas reported a decrease of three basis points from the previous month to 0.74%, while Miami’s rate fell 10 basis points from July to 1.13%.

“Some future developments could affect consumer credit defaults: Auto sales have fallen since December 2016 and are down 11%. Declining auto sales and the normal end-of-model year push to make room for new cars may encourage easier credit conditions and raise concerns about future defaults,” Blitzer noted. “Hurricane damage in Houston and across Florida is creating substantial financial stress. The impact on mortgages on damaged or destroyed homes is not yet clear. Job losses and rising spending needs could lead to increased consumer credit defaults in coming months.”

Posted in Auto Industry NewsComments Off on S&P/Experian: Auto Default Rate Registers Largest Increase Since December 2011

Page 1 of 1412345...10...Last »