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
- 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.)