TrueCar, Inc. (NASDAQ: TRUE), the negotiation-free car buying and selling mobile marketplace, finds that incentive spending as a percentage of average transaction price (ATP) in March was the lowest for the month in six years, signaling continued auto industry health.
Amid the best auto industry and economic fundamentals in a decade, TrueCar estimates the ATP for new light vehicles was $32,201, up 2.1 percent over a year ago, while average incentive spending per unit shrank by $34 to $2,691. The ratio of incentive spending to ATP was 8.4 percent, contracting from 8.6 percent a year ago. Higher transaction prices in March generated $49 billion of revenue, up 1.3 percent from a year ago.
“March was a solid fiscal year finish for some Japanese automakers. Subaru, Honda and Toyota should all post positive net revenue gains for the month compared to last year,” said Eric Lyman, vice president of industry insights for TrueCar. “We expect the industry to sustain a sales and revenue-growth mode. There’s pent up demand from the first quarter due to harsher than normal weather conditions, so the second quarter looks to be even more favorable.”
Strong economic indicators signal continued consumer demand in the new vehicle sector. The National Association for Business Economics this week forecast 3.1 percent growth in gross domestic product this year, the best performance in a decade. The Conference Board also said this week that consumer confidence exceeded expectations in its latest survey, rising from 98.8 to 101.3 in March.
Average Transaction Price (ATP)
| Manufacturer | Mar. 2015 Forecast | Mar. 2014 | Feb. 2015 | Percent Change vs. Mar. 2014 | Percent Change vs. Feb. 2015 |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $30,213 | $30,895 | $30,342 | -2.2% | -0.4% |
| Ford (Ford, Lincoln) | $32,974 | $31,800 | $33,081 | 3.7% | -0.3% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $33,689 | $32,407 | $33,734 | 4.0% | -0.1% |
| Honda (Acura, Honda) | $26,177 | $25,993 | $26,375 | 0.7% | -0.7% |
| Hyundai | $21,775 | $21,391 | $22,499 | 1.8% | -3.2% |
| Kia | $21,373 | $21,800 | $21,500 | -2.0% | -0.6% |
| Nissan (Nissan, Infiniti) | $25,479 | $24,509 | $25,550 | 4.0% | -0.3% |
| Subaru | $26,261 | $25,576 | $26,212 | 2.7% | 0.2% |
| Toyota (Lexus, Scion, Toyota) | $26,873 | $27,500 | $26,789 | -2.3% | 0.3% |
| Volkswagen (Audi, Porsche, Volkswagen) | $29,712 | $29,992 | $28,378 | -0.9% | 4.7% |
| Industry | $32,201 | $31,540 | $32,307 | 2.1% | -0.3% |
TrueCar estimates the average incentive for light vehicles in March decreased $34, or 1.3 percent, from a year ago, while increasing $11, or 0.4 percent, from February 2015.
Incentive per Unit Spending
| Manufacturer | Mar. 2015 Forecast | Mar. 2014 | Feb. 2015 | Percent Change vs. Mar. 2014 | Percent Change vs. Feb. 2015 |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $3,451 | $3,213 | $3,376 | 7.4% | 2.2% |
| Ford (Ford, Lincoln) | $2,864 | $3,342 | $2,756 | -14.3% | 3.9% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $3,137 | $3,401 | $3,103 | -7.8% | 1.1% |
| Honda (Acura, Honda) | $1,957 | $2,112 | $1,807 | -7.3% | 8.3% |
| Hyundai | $2,300 | $1,836 | $2,159 | 25.3% | 6.5% |
| Kia | $3,054 | $2,408 | $2,933 | 26.8% | 4.1% |
| Nissan (Nissan, Infiniti) | $2,547 | $2,704 | $3,179 | -5.8% | -19.9% |
| Subaru | $846 | $794 | $798 | 6.5% | 6.0% |
| Toyota (Lexus, Scion, Toyota) | $2,000 | $1,761 | $1,891 | 13.6% | 5.7% |
| Volkswagen (Audi, Porsche, Volkswagen) | $2,765 | $2,792 | $2,644 | -1.0% | 4.6% |
| Industry | $2,691 | $2,725 | $2,680 | -1.3% | 0.4% |
Last month’s ratio of incentive to ATP for light vehicles was 8.4 percent, down 3.3 percent from March 2014 and up 0.7 percent from February 2015, based on TrueCar analysis. Ford, GM, Nissan and Honda showed the most improvement in ATP ratio in March versus the year-earlier month.
Incentive Spending as a Percentage of ATP
| Manufacturer | Mar. 2015 Forecast | Mar. 2014 | Feb. 2015 | Percent Change vs. Mar. 2014 | Percent Change vs. Feb. 2015 |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | 11.4% | 10.4% | 11.1% | 9.8% | 2.6% |
| Ford (Ford, Lincoln) | 8.7% | 10.5% | 8.3% | -17.4% | 4.2% |
| GM (Buick, Cadillac, Chevrolet, GMC) | 9.3% | 10.5% | 9.2% | -11.3% | 1.2% |
| Honda (Acura, Honda) | 7.5% | 8.1% | 6.9% | -8.0% | 9.1% |
| Hyundai | 10.6% | 8.6% | 9.6% | 23.1% | 10.1% |
| Kia | 14.3% | 11.0% | 13.6% | 29.4% | 4.7% |
| Nissan (Nissan, Infiniti) | 10.0% | 11.0% | 12.4% | -9.4% | -19.6% |
| Subaru | 3.2% | 3.1% | 3.0% | 3.8% | 5.8% |
| Toyota (Lexus, Scion, Toyota) | 7.4% | 6.4% | 7.1% | 16.2% | 5.4% |
| Volkswagen (Audi, Porsche, Volkswagen) | 9.3% | 9.3% | 9.3% | -0.1% | -0.1% |
| Industry | 8.4% | 8.6% | 8.3% | -3.3% | 0.7% |
Total Net Revenue
| Manufacturer | Mar. 2015 Forecast | Mar. 2014 | Percent Change vs. Mar. 2014 |
| FCA (Chrysler, Dodge, Jeep, Ram, Fiat) | $5,967,129,436 | $6,020,755,810 | -0.9% |
| Ford (Ford, Lincoln) | $7,584,017,124 | $7,740,660,600 | -2.0% |
| GM (Buick, Cadillac, Chevrolet, GMC) | $8,654,657,463 | $8,297,715,129 | 4.3% |
| Honda (Acura, Honda) | $3,646,509,196 | $3,465,334,774 | 5.2% |
| Hyundai | $1,339,144,351 | $1,433,303,955 | -6.6% |
| Kia | $1,122,077,596 | $1,194,138,600 | -6.0% |
| Nissan (Nissan, Infiniti) | $3,495,769,384 | $3,655,174,224 | -4.4% |
| Subaru | $1,292,059,328 | $1,137,594,904 | 13.6% |
| Toyota (Lexus, Scion, Toyota) | $6,033,051,447 | $5,922,070,000 | 1.9% |
| Volkswagen (Audi, Porsche, Volkswagen) | $1,455,887,404 | $1,652,859,120 | -11.9% |
| Industry | $49,096,334,816 | $48,486,063,520 | 1.3% |
