Newsroom

ALG Finds Incentive Spending Continuing to Rise at 1.5 percent

Average transaction prices likely to dip 1.1 percent

SANTA MONICA, Calif., (October 3, 2017) - ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $46 billion for the month of September, down 1.1 percent from a year ago.

ALG expects a loss of $522 million in revenue for automakers versus September

  1. Additionally, incentive spending is projected to increase 1.5 percent.

"Incentive spending continues to persist at elevated levels with relief coming from recent cuts in vehicle production and a surge in replacement demand due to hurricanes potentially coming into play in the coming months," said Eric Lyman, ALG's Chief Industry Analyst. "With 6 of the 12 major automakers expected to pay in excess of $4,000 per car in sales incentives, one must question whether we will establish a new normal in terms of spending or whether automakers will collectively pull back and more closely align production with natural consumer demand."

ALG estimates ATP for a new light vehicle was $32,597 in September, down 1.1 percent from a year ago. Average incentive spending per unit grew by $57 to $3,742. The ratio of incentive spending to ATP is expected to be 11.5 percent, up from 11.2 percent a year ago.

Average Transaction Price (ATP)

Manufacturer Sept. 2017 Forecast Sept. 2016 Aug. 2017 YOY MOM
BMW (BMW, Mini) $49,360 $50,887 $48,867 -3.0% 1.0%
Daimler (Mercedes-Benz, Smart) $58,704 $57,298 $58,763 2.5% -0.1%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $33,404 $33,181 $33,571 0.7% -0.5%
Ford (Ford, Lincoln) $35,621 $35,645 $35,193 -0.1% 1.2%
GM (Buick, Cadillac, Chevrolet, GMC) $36,163 $37,670 $36,453 -4.0% -0.8%
Honda (Acura, Honda) $27,392 $27,280 $27,420 0.4% -0.1%
Hyundai $22,953 $23,164 $23,228 -0.9% -1.2%
Kia $22,116 $22,488 $22,293 -1.7% -0.8%
Nissan (Nissan, Infiniti) $27,588 $27,792 $28,030 -0.7% -1.6%
Subaru $28,420 $28,380 $28,307 0.1% 0.4%
Toyota (Lexus, Scion, Toyota) $30,786 $31,155 $31,001 -1.2% -0.7%
Volkswagen (Audi, Porsche, Volkswagen) $33,605 $34,726 $35,007 -3.2% -4.0%
Industry $32,597 $32,959 $32,743 -1.1% -0.4%

Incentive per Unit Spending

Manufacturer Sept. 2017 Forecast Sept. 2016 Aug. 2017 YOY MOM
BMW (BMW, Mini) $4,878 $7,096 $4,793 -31.3% 1.8%
Daimler (Mercedes-Benz, Smart) $4,555 $4,607 $4,591 -1.1% -0.8%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $4,481 $4,430 $4,447 1.1% 0.8%
Ford (Ford, Lincoln) $4,289 $4,452 $4,298 -3.7% -0.2%
GM (Buick, Cadillac, Chevrolet, GMC) $4,919 $4,629 $4,948 6.3% -0.6%
Honda (Acura, Honda) $1,999 $1,910 $1,972 4.6% 1.3%
Hyundai $2,752 $2,344 $2,787 17.4% -1.3%
Kia $3,794 $3,144 $3,768 20.7% 0.7%
Nissan (Nissan, Infiniti) $4,510 $4,237 $4,442 6.4% 1.5%
Subaru $1,026 $1,088 $1,026 -5.7% 0.0%
Toyota (Lexus, Scion, Toyota) $2,786 $2,641 $2,865 5.5% -2.8%
Volkswagen (Audi, Porsche, Volkswagen) $3,692 $4,145 $3,745 -10.9% -1.4%
Industry $3,742 $3,685 $3,731 1.5% 0.3%

Incentive Spending as a Percentage of ATP

Manufacturer Sep. 2017 Forecast Sep. 2016 Aug. 2017 YOY MOM
BMW (BMW, Mini) 9.9% 13.9% 9.8% -29.1% 0.8%
Daimler (Mercedes-Benz, Smart) 7.8% 8.0% 7.8% -3.5% -0.7%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) 13.4% 13.4% 13.2% 0.5% 1.3%
Ford (Ford, Lincoln) 12.0% 12.5% 12.2% -3.6% -1.4%
GM (Buick, Cadillac, Chevrolet, GMC) 13.6% 12.3% 13.6% 10.7% 0.2%
Honda (Acura, Honda) 7.3% 7.0% 7.2% 4.2% 1.4%
Hyundai 12.0% 10.1% 12.0% 18.5% -0.1%
Kia 17.2% 14.0% 16.9% 22.7% 1.5%
Nissan (Nissan, Infiniti) 16.3% 15.2% 15.8% 7.2% 3.2%
Subaru 3.6% 3.8% 3.6% -5.9% -0.4%
Toyota (Lexus, Scion, Toyota) 9.0% 8.5% 9.2% 6.8% -2.1%
Volkswagen (Audi, Porsche, Volkswagen) 11.0% 11.9% 10.7% -8.0% 2.7%
Industry 11.5% 11.2% 11.4% 2.7% 0.7%

(Note: This forecast is based solely on ALG's analysis of industry sales trends and conditions and is not a projection of the company's operations.)

Download the Report