Posts Tagged ‘car incentives’
Buyers spending more – but taking longer to pay off loans.
by Joseph Szczesny on Mar.22, 2013
U.S. car sales are maintaining a strong pace for March, according to several mid-month reports.
New car sales have remained steady in March and are expected to increase by 8 to 10%, year-over-year, according to new estimates from J.D. Power and Associates.
Using data from a broad network of dealers, Power estimates both retail light-vehicle sales and the total light-vehicle rate are consistent with February’s strong performance market. That would work out to around 12.1 million vehicles by consumers and 15.3 million when fleet buyers are included in the mix.
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Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles. They also tend to be more profitable than fleet sales, especially those to daily rental companies. Most makers have been shifting focus to the retail side of the market – in part because that also tends to prop up residuals, or trade-in values.
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Tags: auto incentives, auto loans, auto news, car incentives, car news, joe szczesny, longer auto loans, march 2013 car sales, march auto sales, march car sales, thedetroitbureau
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Incentives also increase.
by Paul A. Eisenstein on Dec.05, 2012
Hyundai boasted the lowest incentives -- and the lowest transaction prices -- last month.
If you bought a car in November odds are you paid more than you would have at almost any time in the past year. Transaction prices – what motorists actually spend after working in incentives and factory options – are at or near record levels.
That’s despite the fact that many manufacturers increased givebacks last month, hoping to keep sales momentum going. They’ve also been working with lenders to ensure that credit continues to become more readily available – though motorists have been stretching out loans and are now taking an average of 64 months to pay off a car purchase.
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“Industry average transaction prices climb once again with consumers’ continued appetite for highly contended vehicles,” said Jesse Toprak, Senior Analyst at the data tracking service TrueCar. “Today’s consumers value a nicely equipped vehicle as much as they do a low cost of ownership. Automakers are getting better at providing all the modern conveniences consumers come to expect for more of their models, resulting in higher overall prices hence improved profitability.”
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Tags: auto financing, auto incentives, auto loans, auto news, auto rebates, auto sales, auto transaction prices, car incentives, car loans, car news, car sales, november 2012 car sales, paul a. eisenstein, paul eisenstein, thedetroitbureau
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Pent-up demand, not givebacks, draw shoppers to showrooms.
by Paul A. Eisenstein on Sep.04, 2012
Hyundai's updated Genesis coupe helped the maker drop incentives and demand higher prices in August.
While a number of key automakers have yet to report their final numbers for August, there’s little doubt it was a strong month for the industry, likely bringing an overall sales increase of around 16%, year-over-year – a sharp contrast to the stuttering numbers from other sectors of the economy.
The August numbers are all the more impressive when considered in light of the fact that incentive spending continued to drop during the month – while transaction prices were up sharply compared to August 2011.
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“There’s still pent-up demand,” driving buyers back into showrooms, suggested Frank Trivieri, vice president of sales for Volkswagen of America, which reported a striking 62.5% year-over-year sales increase.
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Tags: August car sales, Sergio Marchionne, august 2012 car sales, august 2012 transaction prices, auto incentives, auto rebates, average transaction prices, car incentives, paul a. eisenstein, paul eisenstein, thedetroitbureau, truecar
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But customers continue moving up-market.
by Paul A. Eisenstein on Feb.03, 2012
With products like the Elantra flying out the door, Hyundai (and sibling Kia) had the lowest industry incentives last month - but also the lowest average transaction prices.
Trend or just a temporary setback? In recent months, buyers have been steadily moving up-market while also adding significantly more content to the vehicles they buy. Along with cutbacks in the typical industry incentive package that has rapidly driven up the price motorists pay – the average transaction price, or ATP, in industry lingo.
But while January saw a surge in sales, preliminary data suggest they may also be reining in their spending by focusing on lower-priced, less lavishly-equipped models.
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Including cars, light trucks and crossovers, the typical motorist spent $30,512 in January, according to car pricing information tracked by TrueCar.com, a 0.6% decline from December. But while that’s a notably reversal of recent trends, it doesn’t appear to signal an end to the industry’s current upward momentum, analysts stress.
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Tags: Chrysler Incentives, auto givebacks, auto incentives, auto news, auto prices, auto rebates, average tranaction prices, car incentives, car news, car prices, ford incentives, hyundai incentives, january 2012 auto sales, january car sales, paul a. eisenstein, paul eisenstein, thedetroitbureau, toyota incentives, truecar, typical car price
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Japan’s Toyota, Honda still struggle despite hefty incentives.
by Paul A. Eisenstein on Oct.03, 2011
Strong demand for the newest Beetle help drive a big month for Volkswagen.
New car sales defied dire economic news and grew in September with several car makers posting healthy sales gains, pushing the industry’s annualized sales rate to nearly 13 million units, the strongest it has been since the economy began showing signs of a double-dip recession.
But there were some worrisome notes amidst the overall bright picture. The two leading Japanese makers bucked the upward trend again last month despite hefty increases in incentives. Overall, givebacks were up slightly, though some makers were able to cut spending on rebates and cut-rate loans in the face of strong market demand.
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“Auto sales continue to be one of the economy’s few bright spots,” said Robert Carter, Toyota Motor Sales vice president, who also predicted Toyota will start posting positive sales results in October after a long string in sales declines.
Toyota saw another 17.5% drop, year-over-year as the maker continued to struggle to overcome the impact of Japan’s devastating March 11 earthquake and tsunami. Honda, meanwhile, saw its numbers fall 8% last month. Both makers took sharp cuts in production due to supply issues but both Toyota and Honda say they are now back up and running at normal speeds.
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Tags: Ford Sales, GM sales, VW sales, auto incentives, auto news, auto sales, auto sales us economy, car incentives, car news, car sales, chrysler sales, honda sales, hyundai sales, paul a. eisenstein, paul eisenstein, september auto sales, september car sales, thedetroitbureau, toyota sales, toyota slump
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Used cars not far behind.
by Paul A. Eisenstein on Jun.02, 2011
Ford has taken three price hikes this year, one reason it had the highest average transaction price of all major makers in May, analysts report.
There are plenty of reasons why new car sales took a tumble last month – everything from a weak economy to a shortage of some popular Japanese vehicles. But pricing also appears to have been a significant issue, according to industry analysts, with Americans now paying more than ever for new cars, trucks and crossovers.
The average transaction price – what a typical customer actually pays, as opposed to sticker price or the low come-ons you might see advertised – surged to $29,817 in May, according to the data tracking service TrueCar.com. That was up a full $608, or 2.1%, from May 2010 and an increase of $215, or 0.7% over April of this year.
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Significantly, prices rose sharply even though many buyers began shifting from larger to smaller vehicles in a bid for better mileage, analysts noted. Traditionally, U.S. motor vehicle prices are closely linked to the size of an automobile.
And while some potential buyers are rethinking their options, used car prices also are heading skyward.
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Tags: May auto sales, auto incentives, auto news, auto prices, car incentives, car news, car prices, ford prices, gm prices, may car sales, new car prices, paul a. eisenstein, paul eisenstein, thedetroitbureau, toyota prices, used car prices
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Ford sales flat, but Chrysler, Koreans buck the trend with comfortable gains.
by Paul A. Eisenstein on Jun.01, 2011
Even the biggest Chrysler products gained ground in May. The maker was the only one of Detroit's Big Three to post a gain.
Crushed under the weight of declining consumer confidence, rising gas prices, lower incentives and shrinking inventories of Japanese-made vehicles car sales took a sharp tumble in May, though some makers, including long-struggling Chrysler, managed to buck the downturn. It was the first significant downturn for the industry since the American market began to recover in late 2009.
The biggest losers were Japanese makers, like Toyota, who expect to continue being hammered for months by the impact of the March 11 earthquake and tsunami , which nearly shut that country’s auto industry down for a month. Some key models, such as the new 2012 Honda Civic aren’t expected to be back in full supply until late this year.
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But General Motors also saw an unexpected dip in demand reflecting sluggish sales of its big trucks even as consumers rushed to buy the maker’s new and more fuel-efficient small cars.
Overall, analysts described May as a disconcerting start to what is normally the annual spring buying season. Sales had, in fact, been rising steadily all year, reaching a seasonally-adjusted annual sales rate, or SAAR, of 13 million in April. But for May the annualized rate dipped to just 12 million.
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Tags: Ford Sales, GM sales, May auto sales, auto incentives, auto news, car incentives, car news, chrysler news, chrysler sales, ford news, gm news, honda news, honda sales, hyundai news, kia news, may 2011 auto sales, may car sales, paul a. eisenstein, paul eisenstein, thedetroitbureau, toyota news, toyota sales
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Shortage of Japanese products part of the problem.
by Paul A. Eisenstein on May.20, 2011
Sales have taken a tumble at dealerships around the U.S. in recent weeks.
After months of steady growth, the U.S. new car market appears to be taking a nosedive in May, according to observers tracking traffic at the country’s dealer showrooms.
The “dismal” start appears to be the result of a variety of factors, according to a preliminary reports by J.D. Power and Associates, including a sharp cutback in rebates and other incentives. But many potential buyers also appear to be holding back because of a worsening shortage of Japanese vehicles.
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The industry picture isn’t entirely gloomy, however. Demand for used cars is skyrocketing, with price increases hitting never-before-seen levels, as TheDetroitBureau.com reports. (Click Here for that story.)
The soaring cost of fuel is another factor impacting the new car market, according to Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “As a result, the industry will likely be dealing with a lower sales pace at least through the summer selling season, putting pressure on the 2011 outlook.”
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Tags: auto incentives, auto news, car incentives, car news, car sales, japan car shortages, japanese cars, new car prices, new car sales, paul a. eisenstein, paul eisenstein, thedetroitbureau
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Japanese parts shortage masks other increases.
by Paul A. Eisenstein on May.16, 2011
Prices of the old Honda Civic were rising even before the launch of the 2012 model.
Good new or bad, it depends on whether you’re making or selling a car, but one thing indisputable is that the price of the typical new car, truck and crossover has been rising fast this year.
Motorists, used to finding great deals during a long and deep recession, will likely be surprised to see vehicles not just costing more than a year ago, but in some cases several thousand dollars more than just a few months ago, based on industry tracking data.
The biggest and most immediate factor is the vehicle shortage created by the natural disaster that struck Japan on March 11. But makers are also beginning to pass on some of the higher costs they are paying for essential commodities and – in some cases, simply betting that an improving U.S. automotive market will allow them to reduce incentives and raise prices.
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“The current environment will set the industry up for very strong pricing,” said Rod Lache, auto analyst with Deutsche Bank. In April, he estimated, U.S. automakers were already getting from $700 to $1,000 more than they did the year before.
The makers will take the extra money any way they can, though they have generally held back on outright price increases. Toyota, for example, put in place a relatively modest hike, at the beginning of May, running to just over 2%. But according to data from TrueCar.com, some of the maker’s models, such as the Prius, are delivering Average Transaction Prices, or ATPs, of as much as $3,000 more than what they went for at just the beginning of 2011.
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Tags: auto incentives, auto news, auto prices, car incentives, car news, car prices, chrysler news, ford news, ford prices, gm news, gm prices, honda news, honda prices, paul a. eisenstein, paul eisenstein, thedetroitbureau, toyota news, toyota prices, truck prices
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Despite storms, consumers surge back to showrooms.
by Paul A. Eisenstein on Feb.28, 2011
"Nobody's buying," said Ford marketing czar Jim Farley, during the blizzards of early February.
It may have been frigid cold in much of the country, but things were only heating up inside the nation’s new car showrooms, this month. Despite blizzards that led to a slow start, car sales for February will wind up well into the plus column, according to a preliminary report by J.D. Power and Associates.
Using data from dealers across the U.S., the research firm estimates sales will come in about 17.3% above year-ago levels – and 11.7% above January sales.
That’s a significant turnaround in just a matter of weeks. Speaking to TheDetroitBureau.com at the Chicago Auto Show, earlier in February, Ford’s global marketing chief Jim Farley lamented, “Nobody’s buying.”
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It didn’t help that much of the country was being hammered by frigid temperatures and a series of winter storms, but the Ford executive also worried that consumers were waiting for a new round of hefty incentives before signing on the dotted line.
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Tags: February auto sales, GM sales, Jim Farley, auto incentives, auto news, auto rebates, auto sales, car incentives, car news, car sales, detroit sales, february car sales, hyundai sales, paul a. eisenstein, paul eisenstein, thedetroitbureau, toyota sales
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