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TrueCar’s ALG forecasts average new car transaction price to reach $35,932 up 2.4% year over year for December 2019

Automakers Expected to Reach More Than $56B in Revenue

ALG, a subsidiary of TrueCar, and the industry benchmark for determining the future resale value of a vehicle, projects average transaction prices (ATP) to be up 2.4% or $836 from a year ago and up 0.5% or $174 from November 2019.

“Average new vehicle transaction price has increased in every single month of 2019 when compared with the same period a year ago,” said Oliver Strauss, Chief Economist at ALG, a subsidiary of TrueCar. “Consumers have continually opted for higher priced vehicles, including trucks and utilities, but also for luxury. In this year’s slightly decreasing automotive market, we’re seeing luxury sales declining at a slower pace than mainstream sales.”

Additional Insights: (Forecast by ALG)

  • Honda and Nissan are the only automakers expected to be down on ATP year over year, 1.4% and 1.7% respectively. Meanwhile BMW is expected to be up 5.6%.
  • Hyundai and Kia continue to be up on ATP, up 10.7% and 7.7% respectively as their all-new SUV products continue to resonate with consumers.
  • The ratio of incentive spend to ATP for the industry is expected to be 11%, up 1.2% from a year ago and down 5% from November 2019.
  • ALG projects that U.S. revenue from new vehicle sales will reach nearly $56 billion for December 2019, up 2.5% (based on an adjusted daily selling rate) from a year ago and up 11.4% from last month.
  • In ALG’s Retail Health Index (RHI), which measures automaker brand health, most luxury brands are expected to be down this month, indicating high incentive spend absent a gain in retail market share.
  • Lincoln bucked the trend and stood out in RHI as one of the few luxury brands to raise incentives while gaining retail share. This is likely due to their increased SUV lineup with the new or refreshed 2020 models; Aviator, Corsair and Nautilus.
  • For mainstream brands, Honda is expected to have a strong showing this month, leveraging incentives in select segments where they don’t have new products to give themselves a competitive edge.

“With the rebrand of their model names mostly settled, Lincoln is sitting back and enjoying a positive moment in the spotlight at the top of ALG’s Retail Health Index,” said Eric Lyman, Chief Industry Analyst for ALG, a subsidiary of TrueCar. “An expanded SUV product line-up in the sweet-spot of luxury has given Lincoln a modest sales bump while allowing for incentive spend discipline, even during the year-end holiday rush.”

Please click here to view the full press release.

SOURCE: TrueCar

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