New light vehicle ATP up 0.7% to monthly record high
TrueCar, Inc. (NASDAQ: TRUE), the negotiation-free car buying and selling mobile marketplace, finds August’s revenue for new vehicles will likely reach $49 billion for the month, up 0.7 percent versus the same period last year.
The U.S. economy and auto industry continue to benefit from the best fundamentals in over a decade, and brisk consumer demand for premium and utility vehicles remains steady. Despite a slight uptick this month, automakers have generally maintained discipline with incentive spending.
TrueCar estimates the average transaction price (ATP) for a new light vehicle in August is $31,825, up 0.7 percent over a year ago, while average incentive spending per unit grew $79 to $3,066. The ratio of incentive spending to ATP was 9.6 percent, up 1.9 percent over a year ago.
“The auto market remains healthy and ATP in August should hit a monthly record,” said TrueCar Executive Vice President Larry Dominique, who also runs TrueCar’s ALG unit. “Consumer confidence remains strong as evidenced by steady demand, particularly for luxury and higher trim level vehicles, which has resulted in $49 billion of revenue for automakers this month.”
Despite the revenue growth, TrueCar estimates retail sales of new vehicles will decline 3 percent this month, with total industry deliveries, including fleet sales, down 2.9 percent. The Seasonally Adjusted Annual Rate (SAAR) should reach 17.4 million units, keeping the industry on pace to reach 17.2 million sales this year, the highest volume since 2000.
On the TrueCar platform, compact utilities remain very popular among consumers with the Honda CR-V, Toyota RAV4 and Nissan Rouge leading the segment. Separately, Toyota’s Prius hybrid climbed into the top-five searched vehicle list. With the upcoming launch of the fourth-generation Prius, interest in the new model’s design and features has peaked. Consumers are also interested in discounts on the current generation of the world’s best-selling hybrid.
“Data over the last decade show Prius sales and gas prices are highly correlated,” said Eric Lyman, TrueCar’s vice president of industry insights. “Although gas prices remain low, heavy discounting is aiding interest in the current Prius. The model’s popularity should not be minimized as it’s been a top 20 best-selling retail vehicle for the past eight years.”
