TrueCar’s AIG forecasts new car auto sales down slightly yet industry stable reaching over 17m saar for second consecutive month in 2019

Honda Breaks with Other Automakers, Raising Incentives as CR-V Battles All-New RAV4

TrueCar, Inc.’s (NASDAQ: TRUE) data and analytics subsidiary, ALG, projects total new vehicle sales will reach 1,381,835 units in April, down­ 2% from a year ago when adjusted for the same number of active selling days in 2018. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 17.1 million units for the month, the second consecutive month this year to reach the 17M SAAR milestone. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,113,309 units, a decrease of 5.4% from a year ago.

“In line with the trend this year, the auto industry continues to show some struggles in retail sales,” said Oliver Strauss, Chief Economist of TrueCar’s ALG. “Nevertheless, reaching 17M SAAR for the second consecutive month is an indicator of health and stability and consumers continue to remain confident in a robust economic environment.”

Average incentive spending by automakers should reach an estimated $3,488 per vehicle in April down $152 or 4.2% from a year ago, and down 4.2% from March 2019. For April, ALG estimates average transaction price (ATP) for new light vehicles was $34,319, up 2.9% from a year ago, while incentives as a percentage of ATP was at 10.2% down 6.9% year-over-year.

While most automakers continued the downward trend in incentive spending, Honda and Subaru bucked the trend and raised incentive spend this month.

“Honda’s flagship CR-V is likely increasing incentives in order to gain a pricing advantage over a newly re-designed RAV4,” said Cari Crane, Director of Industry Insights at TrueCar’s ALG. “This would indicate that the battle for the compact-SUV segment leader is already heating up.”

ALG’s Retail Health Index (RHI) assessed whether OEMs are gaining market share through consumer demand or through incentives. Luxury utility leaders Mercedes, BMW and Audi are all expected to be down in this month’s RHI.

“Tier one luxury brands may be raising incentives in order to hold market share and offset increases in ATP. Tariff uncertainty could also be playing into this decision, with automakers attempting to get ahead of tariff decisions that could drive down consumer demand,” added Crane.

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SOURCE: TrueCar

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