Tag Archive | "transaction prices"

KBB: Average Transaction Price Climbs to Record High in December


IRVINE, Calif. — The estimated average transaction price for light vehicles in the United States reached an all-time record high of $35,309 in December, according to Kelley Blue Book (KBB). This increase, the auto firm added, amounted to a 1.5% increase over the same time last year.

Virtually all vehicle OEM recorded increases in average transaction prices, with Fiat Chrysler, Ford Motor Co. and Nissan North America leading the way. However, KBB noted that just as new prices have grown, so have incentives.

“Even though transaction prices are at an all-time high, incentives have grown similarly to counterbalance the increased prices,” said Tim Fleming, analyst for Kelley Blue Book.  “Higher average transaction prices are reflective of the rapid shift in consumer demand away from cars and into trucks and utility vehicles, which are more expensive. Should the sales mix of cars to SUVs reach a stable point in the near future, actual transaction price growth could match or fall just short of inflation.”

For Fiat Chrysler, average vehicle transaction prices rose 3.3%, driven primarily by the automaker’s Chrysler, Dodge and Jeep brands. The strength of the Pacifica minivan propelled average transaction prices for the Chrysler brand up 10%, as did fewer sales of the brand’s 200 Sedan. The Dodge brand was up 5% on a lower mix of its compact car, the Dart, and strong performance from the Charger. The average for the Jeep brand was up 2% thanks to a strong month from the refreshed Grand Cherokee.

“December was an interesting month for FCA. Though the Jeep and Ram brands are up, incentives are high, and vehicles such as the Cherokee saw big drops. Jeep has to hope its 2017 redesigns can stem some of the bleeding and help reduce incentives,” said KBB analyst Akshay Anand. “Alfa Romeo and Fiat continue to be drags on FCA, with Alfa’s volume still next to nothing and Fiat continuing to decline in sales. The Pacifica was a great story for Chrysler, but the brand still needs more models in order to become a player.”

Essentially matching Fiat Chrysler’s growth rate, Ford Motor Co. realized a 3% rise in its average transaction price for December. The main drivers were the automaker’s Explorer, Escape and Fusion, which saw their transaction prices climb by 11%, 3%, and 4%, respectively. The Lincoln brand’s average transaction price rose 3% increase due to the Continental $57,156 average transaction price.

Nissan North America realized the biggest year-over-year increase among all the OEMs, with its average transaction price rising 5.9% over the same time last year, according to KBB. Michelle Krebs, senior analyst for AutoTrader, noted that the brand’s growth was driven in large part by the success of its Nissan Rogue sport utility, which benefited from the advertising tie-in with Rogue One: A Star Wars Story.

“Appealing products, incentives, and financing likely drove the industry to another record year in 2016. A three-peat is possible (if not probable) if Wall Street, consumer confidence, and the economy continue to respond favorably to the incoming administration. There are a lot of old cars on the road still and a lot of new technology awaiting shoppers in today’s showrooms,” said Rebecca Lindland, senior analyst for Kelley Blue Book.

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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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Avg. New-Vehicle Transaction Price Up $3,900 Since 2009


WESTLAKE VILLAGE, Calif. — Rising transaction prices for new vehicles have been a big contributor to the health of the auto industry this year, J.D. Power analysts reported this week. They noted that the average new-vehicle transaction price has risen $3,900 since 2009 to $29,600.

Current transaction prices for new vehicle and the rise in sales could push up the value of vehicles purchased to the highest level ever at $407 billion, J.D. Power noted.

“When defining success in the auto industry, whether it is for a specific segment, manufacturer or model, it’s important to look beyond basic sales figures,” said Thomas King, vice president of J.D. Power’s Power Information Network.

King noted that not all vehicle segments have performed equally, with some delivering stronger volumes and lower price growth while others realized greater price growth but weaker sales. Retail sales in the large pickup segment, King pointed out, have increased 4.6% this year, which is below the overall industry sales increase of 5.7%. However, the average price of a pickup has risen by $2,700 over that same period, a gain of 7.5% compared to the industry average of 2.3%.

“From a sales perspective, large pickups have grown slightly slower than the industry overall, but from a price perspective, they have significantly outperformed the industry,” said King.

By contrast, compact SUVs have demonstrated exception retail volume growth of 22.1% so far this year. The average transaction price for models in this segment, however, have changed only slightly by an average of 0.6%. It is these statistical differences that is driving J.D. Power’s belief that sales numbers alone do not provide the best overall picture of industry success.

“With the rapid growth of average transaction prices over the past few years, success needs to be defined more broadly to include overall revenues in addition to sales volumes,” said King.

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Buyers Paid Less for Cars in April than in March


Consumers paid higher prices for new cars in April than a year earlier, but less than they paid in March. According to a survey from research and forecasting company TrueCar.com the average transaction price for light vehicles in the U.S. totaled $30,303 in April. The recent average is $1,219 or 4.2 percent higher than in April 2011 and down $445 or 1.4 percent compared with March 2012.

TrueCar also estimated the average incentive for light vehicles was $2,446 last month, up $129 or 5.6 percent from April 2011 and down $120 or 4.7 percent from March 2012, reported The Wall Street Journal.

“Incentives continued to decline for most automakers with the exception of Honda and Toyota as both are vying for recapturing their lost market share from last year,” said Jesse Toprak, an analyst with TrueCar. “Ford is now spending less on incentives as a percentage of their average transaction price than Honda.”

The following charts show average prices and incentives for the top eight car makers.

Transaction Pricing Forecast

Manufacturer

April 2012 Transaction Price March 2012 Transaction Price April 2011 Transaction Price Percent Change April 2011 to April 2012 Percent Change March 2012 to April 2012
Chrysler (Chrysler, Dodge, Jeep, Ram, Fiat) $29,518 $29,842 $28,469 3.7% -1.1%
Ford (Ford, Lincoln) $31,349 $31,758 $31,054 0.9% -1.3%
GM (Buick, Cadillac, Chevrolet, GMC) $33,027 $33,289 $31,616 4.5% -0.8%
Honda (Acura, Honda) $26,614 $26,249 $25,215 5.5% 1.4%
Hyundai/Kia $22,018 $21,717 $20,074 9.7% 1.4%
Nissan (Nissan, Infiniti) $27,896 $28,322 $27,146 2.8% -1.5%
Toyota (Lexus, Scion, Toyota) $27,612 $27,396 $26,690 3.5% 0.8%
Volkswagen (Audi, Volkswagen) $33,318 $33,124 $31,799 4.8% 0.6%
Industry $30,303 $30,748 $29,084 4.2% -1.4%

In addition, TrueCar.com estimated that the average incentive for light-vehicles was $2,446 in April 2012, down $120 (4.7 percent) from March 2012 and up $129 (5.6 percent) from April 2011.

Average Incentives Forecast
Manufacturer April 2012 Incentives March 2012 Incentives April 2011 Incentives Percent Change April 2011 to April 2012 Percent Change March 2012 to April 2012
Chrysler (Chrysler, Dodge, Jeep, Ram, Fiat) $3,071 $3,272 $2,785 10.3% -6.1%
Ford (Ford, Lincoln) $2,558 $2,840 $2,400 6.6% -9.9%
GM (Buick, Cadillac, Chevrolet, GMC) $3,156 $3,266 $3,067 2.9% -3.4%
Honda (Acura, Honda) $2,398 $2,220 $2,171 10.5% 8.0%
Hyundai/Kia $1,223 $1,237 $1,279 -4.4% -1.1%
Nissan (Nissan, Infiniti) $2,723 $3,050 $1,997 36.4% -10.7%
Toyota (Lexus, Scion, Toyota) $1,823 $1,745 $1,877 -2.9% 4.4%
Volkswagen (Audi, Volkswagen) $2,277 $2,425 $1,819 25.2% -6.1%
Industry $2,446 $2,566 $2,317 5.6% -4.7%

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U.S. Auto Transaction Prices Highest Since ’96-CNW


DETROIT – Automakers and dealers are getting the highest transaction prices in 15 years for vehicles sold in the United States, due to a high demand for a dwindling supply of new vehicles, CNW Research said on Monday, reported Reuters.

The figures are based on early sales in April, when new cars and trucks sold at 87 percent of manufacturers suggested retail price (MSRP), the highest percentage since 1996.

“Dealers are the primary beneficiary of these dwindling discounts since they are using fewer of their own dollars to close a deal than was necessary just a few years ago,” CNW said.

Discounts of 13 percent from MSRP in early April are down from 23 percent under MSRP in 2009 when the U.S. auto industry sales hit a 27-year lows.

The gap between transaction price and MSRP may narrow further as new cars and trucks become more scarce due to auto parts supply issues related to the Japan crisis.

Consumers are looking for fuel-efficient cars and trucks in light of rising gasoline prices, CNW said.

Used cars are in thinner supply, particularly small cars, CNW said. Supply of used small cars has dropped to less than 40 days, half of the days of supply from last April and down from 50 days of supply in January, CNW said.

Early sales in April show that the U.S. new-vehicle market is tracking for 1.11 million units sold for the month, up 14 percent from last April, CNW said.

Credit is loosening also, which may help boost sales, and stands to further narrow the gap between actual selling prices and MSRP.

New-vehicle purchases by those with sub-prime credit is up a staggering 92 percent from last year, CNW said.

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