Automakers in the U.S. enjoyed a monumental month in June with double-digit sales increases seeming to be the norm as they reported the results.
The results were so positive at least one organization – the National Automobile Dealers Association – revised its expected sales number for 2015 upward to 17.2 million vehicles: a 200,000-unit jump.
In order to keep that smoking hot sales pace, some automakers sweetened the pot for certain buyers. Hyundai was the leader of the pack on increased incentive spending with a 34.5% jump over last June and 5.6% spike from May.
Nissan also pushed incentives last month with a 31.5% hike on a year-over-year basis and Hyundai’s sister company, Kia, was up more than 18% compared with last June.
Hyundai offered cash back on virtually every product in its line-up ranging from $1,500 on Veloster and Elantra to $4,000 on the Sonata hybrid. Kia offered the biggest rebate: $8,000 on its slow-selling K900 luxury sedan.
The Korean makers weren’t alone last month as Ford plunked down plenty of money on the hoods of many of its vehicle, including Expeditions, Flexes and Edges for the 2015 model year.
(June auto sales hit record levels. For more, Click Here.)
When incentives are taken as a percentage of the average transaction price, the biggest spenders were: Kia (11.7%), Hyundai (10.5%), Nissan (10.3%), GM (10.2%) and FCA (10.2%).
While small cars and midsize sedans all got some help to move off dealer lots, no group received money like alternative fuel vehicles: hybrids, plug-in hybrids and battery electrics.
(Click Here for details about June auto sales heating up the record books.)
Ford offered rebates as high as $8,000 for its 2015 C-Max Energi, which comes in addition to the federal tax incentives for those vehicles. Other big rebates for that group included:
- 2015 Ford Focus electric: $7,000
- 2015 Ford Fusion Energi: $7,000
- 2015 Hyundai Sonata hybrid: $4,000
- 2015 Kia Optima hybrid: $5,000
- 2015 Volkwagen Toureg hybrid: $1,000
Despite the big money offered up, the average transaction price, or ATP, for new light vehicles is $31,948 in June, up 1% from a year ago, according to TrueCar, Inc.’s analysis. At the same time, average incentive spending per unit appears to be up by $98 this month to $2,846. TrueCar estimates the ratio of incentive spending to ATP should hit 8.9%, up from 8.7% a year ago, based on TrueCar’s analysis.
It would appear the old axiom is true, at least for June, you’ve got to spend money to make money.
(To see why buyers are remaining loyal to their current auto brands, Click Here.)
“We’re projecting all-time record June transaction prices, which translate to an epic $48 billion month for the industry,” said TrueCar President John Krafcik. “Two things are helping drive this growth: more transparent, lower friction retail processes, such as those delivered by TrueCar Certified Dealers, and greater availability of high-demand, high-margin crossover vehicles.”