ALG, the industry benchmark for determining the future resale value of a vehicle, projects U.S. revenue from new vehicle sales will reach $52 billion for the month of March, up 2.2 percent from a year ago.

Higher than average transaction prices should help automakers post a $1.1 billion gain in revenue versus March 2016 despite a projected 13.4 percent increase in incentive spending.

"The industry continues to see strength in year-over-year average transaction price growth; however, there is concern over increasing incentive spending to generate incremental sales beyond organic demand," said Oliver Strauss, ALG's chief economist.

ALG estimates the average transaction price (ATP) for a new light vehicle was $33,045 in March, up 2 percent from a year ago. Average incentive spending per unit grew by $415 to $3,511. The ratio of incentive spending to ATP is expected to be 10.6 percent, up from 9.6 percent a year ago.

"Hefty incentives have negative impacts to resale values, and that can be even more potent in combination with a heavier mix of leasing being used across both the mainstream and luxury segments," said Strauss.

"New model introductions aligning with the start of Spring and tax season rebates could potentially help curb incentive spending, while boosting intrinsic demand and further increasing transaction prices," continued Strauss.
 

Average Transaction Price (ATP)
           
Manufacturer    

Mar. 2017Forecast
 

Mar. 2016
  Feb. 2017  

Percent Changevs. Mar. 2016
 

Percent Changevs. Feb. 2017
BMW (BMW, Mini)     $51,600   $51,725   $53,070   -0.2 %   -2.8 %
Daimler (Mercedes-Benz, Smart)     $62,440   $56,039   $59,890   11.4 %   4.3 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     $33,867   $32,680   $33,867   3.6 %   0.0 %
Ford (Ford, Lincoln)     $35,483   $33,987   $36,002   4.4 %   -1.4 %
GM (Buick, Cadillac, Chevrolet, GMC)     $35,078   $36,723   $36,350   -4.5 %   -3.5 %
Honda (Acura, Honda)     $27,484   $27,538   $27,660   -0.2 %   -0.6 %
Hyundai     $23,363   $23,729   $23,549   -1.5 %   -0.8 %
Kia     $23,345   $22,713   $23,025   2.8 %   1.4 %
Nissan (Nissan, Infiniti)     $27,671   $26,855   $27,951   3.0 %   -1.0 %
Subaru     $27,507   $27,734   $28,126   -0.8 %   -2.2 %
Toyota (Lexus, Scion, Toyota)     $31,605   $31,226   $31,729   1.2 %   -0.4 %
Volkswagen (Audi, Porsche, Volkswagen)     $32,800   $32,647   $32,965   0.5 %   -0.5 %
Industry     $33,045   $32,404   $33,318   2.0 %   -0.8 %
 
           

Incentive per Unit Spending
 
Manufacturer    

Mar. 2017Forecast
  Mar. 2016  

Feb. 2017
 

Percent Changevs. Mar. 2016
 

Percent Changevs. Feb. 2017
BMW (BMW, Mini)     $4,514   $5,128   $4,245   -12.0 %   6.3 %
Daimler (Mercedes-Benz, Smart)     $4,151   $3,714   $4,111   11.8 %   1.0 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     $4,327   $4,043   $4,362   7.0 %   -0.8 %
Ford (Ford, Lincoln)     $3,983   $3,509   $4,011   13.5 %   -0.7 %
GM (Buick, Cadillac, Chevrolet, GMC)     $4,892   $4,029   $5,125   21.4 %   -4.5 %
Honda (Acura, Honda)     $1,941   $1,528   $1,886   27.0 %   2.9 %
Hyundai     $2,341   $2,193   $2,342   6.7 %   -0.1 %
Kia     $2,945   $2,838   $2,978   3.8 %   -1.1 %
Nissan (Nissan, Infiniti)     $4,074   $3,466   $4,080   17.5 %   -0.2 %
Subaru     $901   $568   $950   58.6 %   -5.2 %
Toyota (Lexus, Scion, Toyota)     $2,208   $2,082   $2,259   6.1 %   -2.3 %
Volkswagen (Audi, Porsche, Volkswagen)     $3,808   $3,348   $3,789   13.7 %   0.5 %
Industry     $3,511   $3,096   $3,587   13.4 %   -2.1 %
 
           

Incentive Spending as a Percentage of ATP
 
Manufacturer    

Mar. 2017Forecast
  Mar. 2016   Feb. 2017  

Percent Changevs. Mar. 2016
 

Percent Changevs. Feb. 2017
BMW (BMW, Mini)     8.7 %   9.9 %   8.0 %   -11.8 %   9.4 %
Daimler (Mercedes-Benz, Smart)     6.6 %   6.6 %   6.9 %   0.3 %   -3.1 %
FCA (Chrysler, Dodge, Jeep, Ram, Fiat)     12.8 %   12.4 %   12.9 %   3.3 %   -0.8 %
Ford (Ford, Lincoln)     11.2 %   10.3 %   11.1 %   8.7 %   0.7 %
GM (Buick, Cadillac, Chevrolet, GMC)     13.9 %   11.0 %   14.1 %   27.1 %   -1.1 %
Honda (Acura, Honda)     7.1 %   5.5 %   6.8 %   27.3 %   3.5 %
Hyundai     10.0 %   9.2 %   9.9 %   8.4 %   0.7 %
Kia     12.6 %   12.5 %   12.9 %   1.0 %   -2.5 %
Nissan (Nissan, Infiniti)     14.7 %   12.9 %   14.6 %   14.1 %   0.9 %
Subaru     3.3 %   2.0 %   3.4 %   59.9 %   -3.0 %
Toyota (Lexus, Scion, Toyota)     7.0 %   6.7 %   7.1 %   4.8 %   -1.9 %
Volkswagen (Audi, Porsche, Volkswagen)     11.6 %   10.3 %   11.5 %   13.2 %   1.0 %
Industry     10.6 %   9.6 %   10.8 %   11.2 %   -1.3 %
 

(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.)

About ALG

Founded in 1964 and headquartered in Santa Monica, California, ALG is an industry authority on automotive residual value projections in both the United States and Canada. By analyzing nearly 2,500 vehicle trims each year to assess residual value, ALG provides auto industry and financial services clients with market industry insights, residual value forecasts, consulting and vehicle portfolio management and risk services. ALG is a wholly-owned subsidiary of TrueCar, Inc., a digital automotive marketplace that provides comprehensive pricing transparency about what other people paid for their cars. ALG has been publishing residual values for all cars, trucks and SUVs in the U.S. for over 50 years and in Canada since 1981.

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