Average transaction prices likely to rise 2.1%
TrueCar, Inc. (NASDAQ: TRUE) estimates that U.S. new vehicle sales generated $49.7 billion in April, up 5.6 percent from a year ago and the highest ever recorded for the month. This also marks the auto industry’s 28th consecutive month of year-over-year revenue expansion.
Stronger average transaction prices last month helped automakers post a $2.6 billion gain in revenue compared with April 2015, amid a projected 13.3 percent increase in incentive spending from a year ago. As previously announced, TrueCar estimates sales of new cars and light trucks expanded by 3.2 percent last month to 1,502,100 units.
“Market conditions remain positive as the longest expansion in U.S. auto sales in the post-World War II era continues,” said Eric Lyman, TrueCar’s vice president of industry insights. “We’ll want to see automakers maintain incentive spending discipline throughout the year as the industry approaches a new all-time volume record.”
TrueCar estimates the average transaction price (ATP) for a new light vehicle was $33,054 in April, up 2.1 percent from a year ago. Average incentive spending per unit rose by $355 to $3,021. The ratio of incentive spending to ATP was 9.1 percent, up from 8.2 percent a year ago.
“While there appears to be a slight pullback from the sales pace in March we’re seeing the industry settle into a period of sustained, albeit somewhat more moderate growth,” said Oliver Strauss, TrueCar’s chief economist. “Given that we’re entering a seventh year of industry expansion, it’s not surprising to see this level of maturity with regard to sales.”
April average transaction price
| Manufacturer | April 2016 Forecast | April 2015 | March 2016 | Change vs. April 2015 | Change vs. March 2016 |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $34,425 | $32,444 | $33,515 | 6.1% | 2.7% |
| Ford (Ford, Lincoln) | $36,238 | $34,345 | $34,643 | 5.5% | 4.6% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $37,705 | $34,797 | $37,029 | 8.4% | 1.8% |
| Honda (Acura, Honda) | $28,034 | $27,363 | $27,702 | 2.5% | 1.2% |
| Hyundai | $23,969 | $23,605 | $23,082 | 1.5% | 3.8% |
| Kia | $23,526 | $23,747 | $23,459 | -0.9% | 0.3% |
| Nissan (Nissan, Infiniti) | $28,196 | $27,065 | $26,842 | 4.2% | 5.0% |
| Subaru | $28,258 | $27,045 | $27,462 | 4.5% | 2.9% |
| Toyota (Lexus, Scion, Toyota) | $31,627 | $30,362 | $31,351 | 4.2% | 0.9% |
| Volkswagen (Audi, Porsche, Volkswagen) | $40,585 | $40,335 | $39,366 | 0.6% | 3.1% |
| Industry | $33,054 | $32,362 | $32,887 | 2.1% | 0.5% |
TrueCar estimates the average incentive for light vehicles in April will rise by $355, or 13.1 percent, from a year ago, and decrease $83, or 2.7 percent, from March 2016.
Incentive Spending
| Manufacturer | Incentive per Unit Apr 2016 Forecast | Incentive per Unit % Change vs. Apr 2015 | Incentive per Unit % Change vs. Mar 2016 | Total Spending Apr 2016 Forecast |
| BMW | $4,713 | 15.0% | -8.1% | $150,360,583 |
| Daimler | $3,911 | -0.2% | 5.3% | $125,143,058 |
| FCA | $3,967 | 25.1% | -1.9% | $766,830,850 |
| Ford | $3,423 | 24.0% | -2.5% | $781,461,229 |
| GM | $3,909 | 14.0% | -3.0% | $1,047,512,340 |
| Honda | $1,631 | -7.5% | 6.8% | $234,119,049 |
| Hyundai | $2,201 | -2.4% | 0.4% | $151,863,755 |
| Kia | $2,839 | 5.8% | 0.0% | $153,281,871 |
| Nissan | $3,298 | 11.7% | -4.8% | $395,146,623 |
| Subaru | $572 | -21.4% | 0.7% | $29,215,720 |
| Toyota | $2,017 | 13.8% | -3.1% | $423,282,443 |
| Volkswagen Group | $3,276 | 16.6% | -2.1% | $168,394,146 |
| Industry | $3,021 | 13.3% | -2.7% | $4,526,441,954 |
This month’s ratio of incentive to ATP for light vehicles was 9.1 percent, up from 8.2 percent in April 2015 and down from 9.4 percent in March 2016, based on TrueCar analysis. Subaru, Honda and Hyundai show the most improvement in ATP ratio in April versus the year-earlier month.
April Incentive Spending as a Percentage of ATP
| Manufacturer | April 2016 Forecast | April 2015 | March 2016 |
| BMW (BMW, Mini) | 9.4% | 7.8% | 10.1% |
| Daimler (Mercedes-Benz, Smart) | 6.7% | 6.8% | 6.6% |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | 11.5% | 9.8% | 12.1% |
| Ford (Ford, Lincoln) | 9.4% | 8.0% | 10.1% |
| GM (Buick, Cadillac, Chevrolet, GMC) | 10.4% | 9.9% | 10.9% |
| Honda (Acura, Honda) | 5.8% | 6.4% | 5.5% |
| Hyundai | 9.2% | 9.5% | 9.5% |
| Kia | 12.1% | 11.3% | 12.1% |
| Nissan (Nissan, Infiniti) | 11.7% | 10.9% | 12.9% |
| Subaru | 2.0% | 2.7% | 2.1% |
| Toyota (Lexus, Scion, Toyota) | 6.4% | 5.8% | 6.6% |
| Volkswagen (Audi, Porsche, Volkswagen) | 8.1% | 7.0% | 8.5% |
| Industry | 9.1% | 8.2% | 9.4% |
