SANTA MONICA: TrueCar, Inc estimates that U.S. new vehicle sales totaled $55 billion in March, up 9.7 percent from a year ago and the highest for the month. March also marks the auto industry’s 27th consecutive month of year-over-year revenue expansion.
Record average transaction prices last month helped automakers post a $4.8 billion gain in revenue compared with March 2015, despite a projected 10.4 percent increase in incentive spending. As previously announced, TrueCar estimates sales of new cars and light trucks grew 7.6 percent last month.
“The first quarter of the year appears to have ended nicely for automakers, marked by healthy consumer demand and solid transaction price growth,” said Eric Lyman, TrueCar’s vice president of industry insights. “For the quarter, we expect sales to outpace the year-ago period by 5 percent and each month in 2016 has set a year-over-year revenue record.”
TrueCar estimates the average transaction price (ATP) for a new light vehicle was $32,887 in March, up 2 percent from a year ago. Average incentive spending per unit rose by $284 to $3,005. The ratio of incentive spending to ATP was 9.1 percent, up from 8.4 percent a year ago.
“The incentive to average transaction price ratio remains healthy, and we are not near the alarming levels the industry hit during the recession in 2009,” said Stacey Doyle, TrueCar’s senior industry analyst. “While some automakers are incentivizing consumers more aggressively, these increases are offset by a richer mix of vehicles sold, particularly in the mid- to full-size pickup truck and luxury utility segments.”
TrueCar projects average transaction prices for new vehicles will reach $33,925 in 2016, up 4.2 percent from a year ago. Incentive spending will grow more moderately, rising 3 percent compared to 2015. Average incentive spend per unit should reach $3,011. Overall industry revenue from new vehicles should hit $610.6 billion, up 7.3 percent compared to 2015.
