Automakers See Average Sales Price Pop, Incentives Drop as Buyers Re-Enter Market
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Shares of Ford (NYSE: F), General Motors (NYSE: GM), Toyota (NYSE: TM) and others saw some negative tape Monday despite reports automakers will be spending less to make cars and, at the same time, fetching more for those vehicles.
According to data from TrueCar.com, the average selling price of autos is up 6.9 percent to $30,748 in March. Though input costs are increasing, research shows consumers are actually choosing more expensive models of autos as extra features become more and more appealing.
One dealer pointed to low interest rates, expensive used vehicles, and consumers who are more willing to pay for better amenities.
Discounts on the Detroit 3 automakers have fallen from 15-20 percent in 2005 and 2006 to just 5 percent. TrueCar.com reported the average incentive paid was $2,400 in March, down $43 over the same period last year and $36 from February.
Discounts are also more in-line with demand, something automakers have been working on. For example, GM shut down its Volt production for a month rather than taking the typical route of offering discounts for buyers. As a result, GM's average price was 3.4 percent higher to $33,289 in March.
Stocks in the Automaker industry closed about 2 percent or more lower Monday, though off of days' lows.
According to data from TrueCar.com, the average selling price of autos is up 6.9 percent to $30,748 in March. Though input costs are increasing, research shows consumers are actually choosing more expensive models of autos as extra features become more and more appealing.
One dealer pointed to low interest rates, expensive used vehicles, and consumers who are more willing to pay for better amenities.
Discounts on the Detroit 3 automakers have fallen from 15-20 percent in 2005 and 2006 to just 5 percent. TrueCar.com reported the average incentive paid was $2,400 in March, down $43 over the same period last year and $36 from February.
Discounts are also more in-line with demand, something automakers have been working on. For example, GM shut down its Volt production for a month rather than taking the typical route of offering discounts for buyers. As a result, GM's average price was 3.4 percent higher to $33,289 in March.
Stocks in the Automaker industry closed about 2 percent or more lower Monday, though off of days' lows.
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