Automakers Expected to Reach $50 Billion in Revenue in May

Average transaction prices likely to increase 1.2 percent

SANTA MONICA, Calif.--(BUSINESS WIRE)-- ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $50 billion for the month of May, up 1.5 percent from a year ago.

Higher average transaction prices combined with higher sales volumes due to one more selling day will result in an expected increase of $758 million in revenue for automakers versus May 2016. Additionally, incentive spending is projected to increase 9.5 percent.

“The growth in transaction prices represents a richer mix of cars and light trucks being sold across the industry,” said Eric Lyman, ALG’s Chief Industry Analyst. “This will be critical for automakers as they seek to protect revenue and profits as we start to see sales volumes cool off.”

ALG estimates the average transaction price (ATP) for a new light vehicle was $32,900 in May, up 1.2 percent from a year ago. Average incentive spending per unit grew by $297 to $3,435. The ratio of incentive spending to ATP is expected to be 10.4 percent, up from 9.7 percent a year ago.

Average Transaction Price (ATP)

Manufacturer		May. 2017Forecast		May. 2016		Apr. 2017		Percent Changevs.May. 2016		Percent Changevs.Apr. 2017
BMW (BMW, Mini)		$52,200		$51,000		$52,500		2.4%		-0.6%
Daimler (Mercedes-Benz, Smart)		$62,400		$57,700		$61,700		8.1%		1.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)		$33,300		$32,800		$33,300		1.5%		0.0%
Ford (Ford, Lincoln)		$36,100		$35,000		$36,100		3.1%		0.0%
GM (Buick, Cadillac, Chevrolet, GMC)		$36,700		$36,800		$37,000		-0.3%		-0.8%
Honda (Acura, Honda)		$27,600		$27,300		$27,400		1.1%		0.7%
Hyundai		$22,700		$23,800		$22,800		-4.6%		-0.4%
Kia		$22,900		$22,900		$22,900		0.0%		0.0%
Nissan (Nissan, Infiniti)		$27,700		$27,200		$27,700		1.8%		0.0%
Subaru		$27,900		$27,800		$28,000		0.4%		-0.4%
Toyota (Lexus, Scion, Toyota)		$31,400		$31,300		$31,400		0.3%		0.0%
Volkswagen (Audi, Porsche, Volkswagen)		$34,100		$34,100		$34,500		0.0%		-1.2%
Industry		$32,900		$32,500		$33,000		1.2%		-0.3%

Incentive per Unit Spending

Manufacturer		May. 2017Forecast		May. 2016		Apr. 2017		Percent Changevs.May. 2016		Percent Changevs.Apr. 2017
BMW (BMW, Mini)		$4,550		$5,724		$4,424		-20.5%		2.8%
Daimler (Mercedes-Benz, Smart)		$4,511		$4,737		$4,557		-4.8%		-1.0%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)		$4,250		$4,115		$4,359		3.3%		-2.5%
Ford (Ford, Lincoln)		$4,090		$3,596		$4,114		13.7%		-0.6%
GM (Buick, Cadillac, Chevrolet, GMC)		$4,255		$4,057		$4,238		4.9%		0.4%
Honda (Acura, Honda)		$1,833		$1,756		$1,809		4.4%		1.3%
Hyundai		$3,166		$2,104		$3,135		50.5%		1.0%
Kia		$3,240		$2,734		$3,247		18.5%		-0.2%
Nissan (Nissan, Infiniti)		$3,867		$3,242		$3,903		19.3%		-0.9%
Subaru		$969		$610		$957		58.9%		1.3%
Toyota (Lexus, Scion, Toyota)		$2,323		$2,176		$2,346		6.8%		-1.0%
Volkswagen (Audi, Porsche, Volkswagen)		$4,075		$3,605		$4,008		13.0%		1.7%
Industry		$3,435		$3,138		$3,443		9.5%		-0.2%

Incentive Spending as a Percentage of ATP

Manufacturer		May. 2017Forecast		May. 2016		Apr. 2017		Percent Changevs.May. 2016		Percent Changevs.Apr. 2017
BMW (BMW, Mini)		8.7%		11.2%		8.4%		-22.3%		3.4%
Daimler (Mercedes-Benz, Smart)		7.2%		8.2%		7.4%		-12.0%		-2.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)		12.8%		12.5%		13.1%		1.7%		-2.5%
Ford (Ford, Lincoln)		11.3%		10.3%		11.4%		10.3%		-0.6%
GM (Buick, Cadillac, Chevrolet, GMC)		11.6%		11.0%		11.5%		5.2%		1.2%
Honda (Acura, Honda)		6.6%		6.4%		6.6%		3.2%		0.6%
Hyundai		13.9%		8.8%		13.7%		57.8%		1.4%
Kia		14.1%		11.9%		14.2%		18.5%		-0.2%
Nissan (Nissan, Infiniti)		14.0%		11.9%		14.1%		17.1%		-0.9%
Subaru		3.5%		2.2%		3.4%		58.4%		1.7%
Toyota (Lexus, Scion, Toyota)		7.4%		7.0%		7.5%		6.4%		-1.0%
Volkswagen (Audi, Porsche, Volkswagen)		11.9%		10.6%		11.6%		13.0%		2.9%
Industry		10.4%		9.7%		10.4%		8.1%		0.1%

(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 ALG

Founded 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170601005470/en/

TrueCar, Inc.
[email protected]
Veronica Cardenas
424-258-2487
[email protected]

Source: ALG

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Additional Information on the Ehrmann Family Increasing Its Equity Stake in Artprice by Artmarket as Part of Artprice's "AI-First" Transformation
• Alibaba Group Announced Pricing of HK$80 Billion Placing of New Shares in Hong Kong
• She Made it – the Youngest South African Woman to Swim the Channel