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January sales and ATPs suggest a healthy start to 2018, despite continued elevated incentive spending

Average transaction prices likely to rise 1.9 percent

SANTA MONICA, Calif., (February 1, 2018) - ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $39 billion for the month of January, up 2.4 percent from a year ago.

ALG expects a gain of $907 million in revenue for automakers versus January 2017. Additionally, incentive spending is projected to increase 9.8 percent year over year.

"Average Transaction Prices continue to show gains, validating ALG's outlook for a strong and healthy retail automotive landscape in 2018," said Eric Lyman, ALG's chief industry analyst. "The month over month drop is expected, given the higher share of luxury vehicles in December, but the increase in ATP over last January indicates sustained consumer demand. However, incentives continue to be a struggle, with automakers once again eclipsing the 11 percent mark in incentive spending as a percentage of ATP."

ALG estimates ATP for a new light vehicle was $33,540 in January, up 1.9 percent from a year ago. Average incentive spending per unit grew by $340 to $3,812. The ratio of incentive spending to ATP is expected to be 11.4 percent, up 7.8 percent from a year ago.

Average Transaction Price (ATP)

Manufacturer Jan. 2018 Forecast Jan. 2017 Dec. 2017 YOY MOM
BMW (BMW, Mini) $51,894 $50,569 $51,654 2.6% 0.5%
Daimler (Mercedes-Benz, Smart) $62,182 $58,389 $59,866 6.5% 3.9%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $34,468 $33,190 $34,252 3.9% 0.6%
Ford (Ford, Lincoln) $37,609 $36,373 $37,909 3.4% -0.8%
GM (Buick, Cadillac, Chevrolet, GMC) $36,469 $36,379 $37,956 0.2% -3.9%
Honda (Acura, Honda) $27,997 $27,331 $28,556 2.4% -2.0%
Hyundai $22,458 $23,379 $22,535 -3.9% -0.3%
Kia $23,091 $22,663 $22,785 1.9% 1.3%
Nissan (Nissan, Infiniti) $27,503 $27,594 $28,176 -0.3% -2.4%
Subaru $27,697 $27,870 $27,904 -0.6% -0.7%
Toyota (Lexus, Scion, Toyota) $31,801 $31,563 $32,668 0.8% -2.7%
Volkswagen (Audi, Porsche, Volkswagen) $34,583 $32,905 $34,064 5.1% 1.5%
Industry $33,540 $32,916 $34,276 1.9% -2.1%

Incentive per Unit Spending

Manufacturer Jan. 2018 Forecast Jan. 2017 Dec. 2017 YOY MOM
BMW (BMW, Mini) $4,766 $4,032 $5,349 18.2% -10.9%
Daimler (Mercedes-Benz, Smart) $4,949 $4,465 $5,174 10.8% -4.4%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $4,379 $4,219 $4,336 3.8% 1.0%
Ford (Ford, Lincoln) $4,421 $4,144 $4,431 6.7% -0.2%
GM (Buick, Cadillac, Chevrolet, GMC) $5,242 $4,587 $5,548 14.3% -5.5%
Honda (Acura, Honda) $2,063 $2,095 $2,087 -1.5% -1.2%
Hyundai $3,047 $2,176 $3,097 40.0% -1.6%
Kia $3,413 $3,366 $3,447 1.4% -1.0%
Nissan (Nissan, Infiniti) $4,370 $3,993 $4,572 9.4% -4.4%
Subaru $1,284 $966 $1,257 32.9% 2.1%
Toyota (Lexus, Scion, Toyota) $2,430 $2,212 $2,778 9.8% -12.5%
Volkswagen (Audi, Porsche, Volkswagen) $3,617 $3,418 $3,774 5.8% -4.2%
Industry $3,812 $3,472 $3,968 9.8% -3.9%

Incentive Spending as a Percentage of ATP

Manufacturer Jan. 2018 Forecast Jan. 2017 Dec. 2017 YOY MOM
BMW (BMW, Mini) 9.2% 8.0% 10.4% 15.2% -11.3%
Daimler (Mercedes-Benz, Smart) 8.0% 7.6% 8.6% 4.1% -7.9%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) 12.7% 12.7% 12.7% -0.1% 0.3%
Ford (Ford, Lincoln) 11.8% 11.4% 11.7% 3.2% 0.6%
GM (Buick, Cadillac, Chevrolet, GMC) 14.4% 12.6% 14.6% 14.0% -1.7%
Honda (Acura, Honda) 7.4% 7.7% 7.3% -3.9% 0.8%
Hyundai 13.6% 9.3% 13.7% 45.8% -1.3%
Kia 14.8% 14.9% 15.1% -0.5% -2.3%
Nissan (Nissan, Infiniti) 15.9% 14.5% 16.2% 9.8% -2.1%
Subaru 4.6% 3.5% 4.5% 33.7% 2.9%
Toyota (Lexus, Scion, Toyota) 7.6% 7.0% 8.5% 9.0% -10.2%
Volkswagen (Audi, Porsche, Volkswagen) 10.5% 10.4% 11.1% 0.7% -5.6%
Industry 11.4% 10.5% 11.6% 7.8% -1.8%

(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.)