ALG Expects Automakers to Reach $56 Billion in Revenue in December

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Average transaction prices likely to rise 2.7 percent

January 3, 2018 7:00 AM EST

SANTA MONICA, Calif., Jan. 3, 2018 /PRNewswire/ -- ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $56 billion for the month of December, down 1.4 percent from a year ago.

ALG expects a loss of $786 million in revenue for automakers versus December 2016 due to one less selling day in December. Additionally, incentive spending is projected to increase 2.4 percent.

"Despite significant increases in Average Transaction Prices, overall sales were no match for the blistering pace of December 2016, leading to an overall decline in automaker revenue on a year over year basis," said Eric Lyman, ALG's chief industry analyst. "The return of GM's "Employee Discount for Everyone" campaign resulted in the largest rise of incentive spending on a month over month basis among major OEMs. Collectively, automakers are bracing for slower sales in 2018 with lower overall production volume, which should allow for a pullback on elevated incentive levels."

ALG estimates ATP for a new light vehicle was $34,309 in December, up 2.7 percent from a year ago. Average incentive spending per unit grew by $88 to $3,844. The ratio of incentive spending to ATP is expected to be 11.2 percent, relatively flat from a year ago.

Average Transaction Price (ATP)

Manufacturer

Dec. 2017 Forecast

Dec. 2016

Nov. 2017

YOY

MOM

BMW (BMW, Mini)

$52,303

$50,248

$51,646

4.1%

1.3%

Daimler (Mercedes-Benz, Smart)

$60,473

$57,370

$60,839

5.4%

-0.6%

FCA (Chrysler, Dodge, Jeep, Ram, Fiat)

$34,647

$33,317

$34,001

4.0%

1.9%

Ford (Ford, Lincoln)

$37,958

$36,278

$36,801

4.6%

3.1%

GM (Buick, Cadillac, Chevrolet, GMC)

$38,603

$37,435

$37,712

3.1%

2.4%

Honda (Acura, Honda)

$28,417

$27,540

$28,092

3.2%

1.2%

Hyundai

$22,461

$22,945

$22,363

-2.1%

0.4%

Kia

$22,672

$22,893

$22,067

-1.0%

2.7%

Nissan (Nissan, Infiniti)

$28,195

$28,253

$27,858

-0.2%

1.2%

Subaru

$27,941

$27,986

$27,979

-0.2%

-0.1%

Toyota (Lexus, Scion, Toyota)

$32,791

$32,618

$32,470

0.5%

1.0%

Volkswagen (Audi, Porsche, Volkswagen)

$35,310

$33,597

$34,780

5.1%

1.5%

Industry

$34,309

$33,416

$33,723

2.7%

1.7%

 

Incentive per Unit Spending

Manufacturer

Dec. 2017 Forecast

Dec. 2016

Nov. 2017

YOY

MOM

BMW (BMW, Mini)

$5,312

$5,819

$5,397

-8.7%

-1.6%

Daimler (Mercedes-Benz, Smart)

$5,003

$4,797

$5,186

4.3%

-3.5%

FCA (Chrysler, Dodge, Jeep, Ram, Fiat)

$4,260

$4,275

$4,226

-0.3%

0.8%

Ford (Ford, Lincoln)

$4,662

$4,240

$4,667

9.9%

-0.1%

GM (Buick, Cadillac, Chevrolet, GMC)

$5,007

$4,797

$4,770

4.4%

5.0%

Honda (Acura, Honda)

$2,006

$2,152

$1,954

-6.8%

2.7%

Hyundai

$3,095

$2,622

$3,147

18.0%

-1.6%

Kia

$3,413

$3,369

$3,439

1.3%

-0.7%

Nissan (Nissan, Infiniti)

$4,368

$4,330

$4,372

0.9%

-0.1%

Subaru

$1,264

$1,183

$1,242

6.9%

1.8%

Toyota (Lexus, Scion, Toyota)

$2,840

$2,840

$2,784

0.0%

2.0%

Volkswagen (Audi, Porsche, Volkswagen)

$3,808

$4,541

$3,806

-16.1%

0.1%

Industry

$3,844

$3,756

$3,803

2.4%

1.1%

 

Incentive Spending as a Percentage of ATP

Manufacturer

Dec. 2017 Forecast

Dec. 2016

Nov. 2017

YOY

MOM

BMW (BMW, Mini)

10.2%

11.6%

10.5%

-12.3%

-2.8%

Daimler (Mercedes-Benz, Smart)

8.3%

8.4%

8.5%

-1.1%

-2.9%

FCA (Chrysler, Dodge, Jeep, Ram, Fiat)

12.3%

12.8%

12.4%

-4.2%

-1.1%

Ford (Ford, Lincoln)

12.3%

11.7%

12.7%

5.1%

-3.2%

GM (Buick, Cadillac, Chevrolet, GMC)

13.0%

12.8%

12.6%

1.2%

2.5%

Honda (Acura, Honda)

7.1%

7.8%

7.0%

-9.6%

1.5%

Hyundai

13.8%

11.4%

14.1%

20.6%

-2.1%

Kia

15.1%

14.7%

15.6%

2.3%

-3.4%

Nissan (Nissan, Infiniti)

15.5%

15.3%

15.7%

1.1%

-1.3%

Subaru

4.5%

4.2%

4.4%

7.0%

1.9%

Toyota (Lexus, Scion, Toyota)

8.7%

8.7%

8.6%

-0.5%

1.0%

Volkswagen (Audi, Porsche, Volkswagen)

10.8%

13.5%

10.9%

-20.2%

-1.4%

Industry

11.2%

11.2%

11.3%

-0.3%

-0.6%

(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 ALGFounded 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.

Contact[email protected] Veronica Cardenas 424-258-2487[email protected]

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/alg-expects-automakers-to-reach-56-billion-in-revenue-in-december-300576734.html

SOURCE ALG


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