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ALG Finds Incentives Increase as August Auto Sales Dip

Average transaction prices likely to rise 0.5 percent

SANTA MONICA, Calif., (September 1, 2017) - ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $49 billion for the month of August, up 1.7 percent from a year ago.

ALG expects an increase of $820 million in revenue for automakers versus August

  1. Additionally, incentive spending is projected to increase 12.7 percent.

“Automakers continue to navigate the sales plateau with incentive spending outpacing ATP gains, primarily driven by excess supply from overproduction and an overweight mix of passenger cars,” said Eric Lyman, ALG’s Chief Industry Analyst. “Volkswagen continues to be a bright spot, with all-new key crossover segment product driving a substantial 6.5% year-over-year increase in ATP.

“Model year changeover in the 3rd quarter creates a seasonal spike in incentive spending, and 2017 is no different. ALG still expects overall spending to decline slightly over the long term as automakers acclimate to a lower overall sales volume in the industry,” continued Lyman.

ALG estimates ATP for a new light vehicle was $32,346 in August, up 0.5 percent from a year ago. Average incentive spending per unit grew by $429 to $3,799. The ratio of incentive spending to ATP is expected to be 11.7 percent, up from 10.5 percent a year ago.

Average Transaction Price (ATP)

Manufacturer Aug. 2017 Forecast Aug. 2016 July 2017 Percent Change vs. Aug. 2016 Percent Change vs. July 2017
BMW (BMW, Mini) $51,231 $50,524 $51,539 1.4% -0.6%
Daimler (Mercedes-Benz, Smart) $58,512 $57,933 $56,640 1.0% 3.3%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $33,502 $32,877 $33,481 1.9% 0.1%
Ford (Ford, Lincoln) $35,484 $34,960 $35,236 1.5% 0.7%
GM (Buick, Cadillac, Chevrolet, GMC) $36,263 $36,227 $37,170 0.1% -2.4%
Honda (Acura, Honda) $27,272 $27,109 $27,463 0.6% -0.7%
Hyundai $23,048 $23,035 $23,095 0.1% -0.2%
Kia $22,312 $22,447 $22,357 -0.6% -0.2%
Nissan (Nissan, Infiniti) $27,520 $26,901 $27,300 2.3% 0.8%
Subaru $27,776 $27,860 $27,610 -0.3% 0.6%
Toyota (Lexus, Scion, Toyota) $30,361 $30,792 $30,604 -1.4% -0.8%
Volkswagen (Audi, Porsche, Volkswagen) $34,941 $32,808 $34,591 6.5% 1.0%
Industry $32,346 $32,198 $32,411 0.5% -0.2%

Incentive per Unit Spending

Manufacturer Aug. 2017 Forecast Aug 2016 July 2017 Percent Change vs. Aug 2016 Percent Change vs. July 2017
BMW (BMW, Mini) $5,103 $6,480 $4,831 -21.2% 5.6%
Daimler (Mercedes-Benz, Smart) $4,973 $4,371 $4,922 13.8% 1.0%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $4,650 $4,205 $4,479 10.6% 3.8%
Ford (Ford, Lincoln) $4,577 $4,153 $4,387 10.2% 4.3%
GM (Buick, Cadillac, Chevrolet, GMC) $4,546 $4,199 $4,304 8.3% 5.6%
Honda (Acura, Honda) $2,226 $1,620 $2,046 37.4% 8.8%
Hyundai $3,039 $2,420 $2,943 25.6% 3.3%
Kia $4,112 $2,765 $3,865 48.7% 6.4%
Nissan (Nissan, Infiniti) $4,743 $3,822 $4,530 24.1% 4.7%
Subaru $1,170 $977 $1,099 19.7% 6.4%
Toyota (Lexus, Scion, Toyota) $2,876 $2,412 $2,861 19.2% 0.5%
Volkswagen (Audi, Porsche, Volkswagen) $3,723 $3,936 $3,567 -5.4% 4.4%
Industry $3,799 $3,370 $3,638 12.7% 4.4%

Incentive Spending as a Percentage of ATP

Manufacturer Aug. 2017 Forecast Aug. 2016 July 2017 Percent Change vs. August 2016 Percent Change vs. July 2017
BMW (BMW, Mini) 10.0% 12.8% 9.4% -22.3% 6.3%
Daimler (Mercedes-Benz, Smart) 8.5% 7.5% 8.7% 12.6% -2.2%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) 13.9% 12.8% 13.4% 8.5% 3.8%
Ford (Ford, Lincoln) 12.9% 11.9% 12.5% 8.6% 3.6%
GM (Buick, Cadillac, Chevrolet, GMC) 12.5% 11.6% 11.6% 8.1% 8.3%
Honda (Acura, Honda) 8.2% 6.0% 7.4% 36.6% 9.6%
Hyundai 13.2% 10.5% 12.7% 25.5% 3.5%
Kia 18.4% 12.3% 17.3% 49.6% 6.6%
Nissan (Nissan, Infiniti) 17.2% 14.2% 16.6% 21.3% 3.9%
Subaru 4.2% 3.5% 4.0% 20.1% 5.8%
Toyota (Lexus, Scion, Toyota) 9.5% 7.8% 9.3% 20.9% 1.3%
Volkswagen (Audi, Porsche, Volkswagen) 10.7% 12.0% 10.3% -11.2% 3.3%
Industry 11.7% 10.5% 11.2% 12.2% 4.6%

(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.)

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