Record average transaction prices help push automaker revenue to $45 billion this month
TrueCar, Inc. (NASDAQ: TRUE), the modern car-buying service, raised its 2015 annual forecast by 200,000 units to 17.4 million as sales growth in the remaining months of 2015 is poised to remain vigorous.
New auto sales in September, aided by a later-than-usual Labor Day, should expand by 12.6 percent from a year ago, while the Seasonally Adjusted Annual Rate (SAAR) should reach 17.7 million units. That strength underpins TrueCar’s revised full-year industry forecast of 17.4 million units, the highest volume since 2000.
Retail share of the total industry likely expanded a full point in September versus last year, indicating busier-than-average showrooms. Confident consumers are expected to push new vehicle revenue to a record $45 billion for the month, up 13.2 percent versus the same period last year.
“Fundamental indicators point to an outstanding market, with auto sales poised to hit a 15-year high,” said TrueCar Executive Vice President Larry Dominique, who also leads TrueCar’s ALG unit. “A flourishing industry positions annual automaker revenue to hit $565 billion for the first time.”
TrueCar estimates the average transaction price (ATP) for a new light vehicle in September will be $32,263, up 0.5 percent over last year, setting a monthly record. Meanwhile, average incentive spending per unit grew $117 to $3,090. The ratio of incentive spending to ATP was 9.6 percent, up 3.4 percent over a year ago.
“Although the industry remains solid, automakers are electing to increase incentives,” said Stacey Doyle, TrueCar’s senior industry analyst. “The incentive-to-average transaction price ratio has been at somewhat higher than normative levels for three consecutive months. Typically, automakers ease up on incentives in October and November.”
Midsize utilities are very popular among consumers on the TrueCar platform this month with the Jeep Grand Cherokee, Jeep Wrangler and Honda Pilot all making the top 10 list of most-searched vehicles. Separately, Volkswagen’s TDI models have taken a notable decline on the platform, with a 33 percent decline in consumer interest following the company’s admission that software on the vehicles was designed to fool U.S. emissions tests.
“Volkswagen’s stop sell of diesel vehicles in the U.S. causes a noticeable hit to its September revenue, with a 7.7 percent decline,” said Dominique. “We expect sales to dip by at least by 5 percent and incentives to increase by $235 per unit, which will be essential to push non-impacted models off the lots.”
Average Transaction Price (ATP)
| Manufacturer | Sep. 2015 Forecast | Sep. 2014 | Aug. 2015 | Percent Change vs. Sep. 2014 | Percent Change vs. Aug. 2015 |
| BMW (BMW, Mini) | $48,758 | $47,919 | $49,232 | 1.8% | -1.0% |
| Daimler (Mercedes-Benz, Smart) | $57,977 | $56,624 | $57,663 | 2.4% | 0.5% |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $32,756 | $31,763 | $32,870 | 3.1% | -0.3% |
| Ford (Ford, Lincoln) | $34,994 | $33,817 | $34,739 | 3.5% | 0.7% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $35,306 | $35,393 | $35,392 | -0.2% | -0.2% |
| Honda (Acura, Honda) | $27,510 | $27,026 | $27,250 | 1.8% | 1.0% |
| Hyundai | $23,574 | $24,269 | $23,626 | -2.9% | -0.2% |
| Kia | $23,230 | $23,346 | $23,136 | -0.5% | 0.4% |
| Nissan (Nissan, Infiniti) | $27,166 | $26,750 | $27,188 | 1.6% | -0.1% |
| Subaru | $27,259 | $26,657 | $26,871 | 2.3% | 1.4% |
| Toyota (Lexus, Scion, Toyota) | $30,239 | $30,350 | $30,509 | -0.4% | -0.9% |
| Volkswagen (Audi, Porsche, Volkswagen) | $38,214 | $39,250 | $39,354 | -2.6% | -2.9% |
| Industry | $32,263 | $32,087 | $32,207 | 0.5% | 0.2% |
TrueCar estimates the average incentive for light vehicles in September will increase $117, or 3.9 percent, from a year ago, and decreasing $3, or 0.1 percent, from August 2015.
Incentive per Unit Spending
| Manufacturer | Sep. 2015 Forecast | Sep. 2014 | Aug. 2015 | Percent Change vs. Sep. 2014 | Percent Change vs. Aug. 2015 |
| BMW (BMW, Mini) | $4,449 | $4,310 | $4,496 | 3.2% | -1.0% |
| Daimler (Mercedes-Benz, Smart) | $4,608 | $3,782 | $4,601 | 21.9% | 0.2% |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $3,624 | $3,531 | $3,587 | 2.6% | 1.0% |
| Ford (Ford, Lincoln) | $3,503 | $3,591 | $3,470 | -2.5% | 0.9% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $4,037 | $3,671 | $4,036 | 10.0% | 0.0% |
| Honda (Acura, Honda) | $2,130 | $2,191 | $2,119 | -2.8% | 0.5% |
| Hyundai | $2,521 | $1,662 | $2,539 | 51.7% | -0.7% |
| Kia | $2,904 | $2,587 | $2,913 | 12.3% | -0.3% |
| Nissan (Nissan, Infiniti) | $3,249 | $3,236 | $3,437 | 0.4% | -5.5% |
| Subaru | $596 | $690 | $605 | -13.6% | -1.5% |
| Toyota (Lexus, Scion, Toyota) | $2,179 | $2,175 | $2,208 | 0.2% | -1.3% |
| Volkswagen (Audi, Porsche, Volkswagen) | $3,019 | $2,784 | $3,061 | 8.4% | -1.4% |
| Industry | $3,090 | $2,974 | $3,094 | 3.9% | -0.1% |
This month’s ratio of incentive to ATP for light vehicles was 9.6 percent, up 3.4 percent from September 2014 and unchanged from August 2015, based on TrueCar analysis. Subaru and Ford show the most improvement in ATP ratio in September versus the year-earlier month.
Incentive Spending as a Percentage of ATP
| Manufacturer | Sep. 2015 Forecast | Sep. 2014 | Aug. 2015 | Percent Change vs.
Sep. 2014 |
Percent Change vs. Aug. 2015 |
| BMW (BMW, Mini) | 9.1% | 9.0% | 9.1% | 1.4% | -0.1% |
| Daimler (Mercedes-Benz, Smart) | 7.9% | 6.7% | 8.0% | 19.0% | -0.4% |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | 11.1% | 11.1% | 10.9% | -0.5% | 1.4% |
| Ford (Ford, Lincoln) | 10.0% | 10.6% | 10.0% | -5.7% | 0.2% |
| GM (Buick, Cadillac, Chevrolet, GMC) | 11.4% | 10.4% | 11.4% | 10.2% | 0.3% |
| Honda (Acura, Honda) | 7.7% | 8.1% | 7.8% | -4.5% | -0.4% |
| Hyundai | 10.7% | 6.8% | 10.7% | 56.2% | -0.5% |
| Kia | 12.5% | 11.1% | 12.6% | 12.8% | -0.7% |
| Nissan (Nissan, Infiniti) | 12.0% | 12.1% | 12.6% | -1.1% | -5.4% |
| Subaru | 2.2% | 2.6% | 2.3% | -15.5% | -2.9% |
| Toyota (Lexus, Scion, Toyota) | 7.2% | 7.2% | 7.2% | 0.6% | -0.4% |
| Volkswagen (Audi, Porsche, Volkswagen) | 7.9% | 7.1% | 7.8% | 11.4% | 1.5% |
| Industry | 9.6% | 9.3% | 9.6% | 3.4% | -0.3% |
Total Net Revenue
| Manufacturer | Sep. 2015 Forecast | Sep. 2014 | Percent Change vs. Sep. 2014 |
| BMW (BMW, Mini) | $1,521,259,778 | $1,431,196,773 | 6.3% |
| Daimler (Mercedes-Benz, Smart) | $1,797,300,591 | $1,714,065,104 | 4.9% |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $6,151,641,603 | $5,438,079,704 | 13.1% |
| Ford (Ford, Lincoln) | $7,453,616,772 | $6,070,760,206 | 22.8% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $8,600,462,892 | $7,908,105,741 | 8.8% |
| Honda (Acura, Honda) | $3,576,273,944 | $3,195,094,798 | 11.9% |
| Hyundai | $1,532,314,324 | $1,359,306,690 | 12.7% |
| Kia | $1,161,482,083 | $948,501,288 | 22.5% |
| Nissan (Nissan, Infiniti) | $3,069,724,893 | $2,754,046,250 | 11.5% |
| Subaru | $1,406,572,200 | $1,106,718,669 | 27.1% |
| Toyota (Lexus, Scion, Toyota) | $6,023,542,277 | $5,076,917,650 | 18.6% |
| Volkswagen (Audi, Porsche, Volkswagen) | $1,624,098,690 | $1,759,499,000 | -7.7% |
| Industry | $45,271,481,386 | $39,980,594,522 | 13.2% |
