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New Car Auto Sales Expected to be Down for July While SAAR Continues to Fluctuate in 2019

1071 Days ago

SANTA MONICA, Calif., July 26, 2019 (GLOBE NEWSWIRE) -- TrueCar, Inc.’s (NASDAQ: TRUE) data and analytics subsidiary, ALG, projects total new vehicle sales will reach 1,385,568 units in July, down­ 2.9% from a year ago when adjusted for the same number of selling days. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 16.6 million units. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,185,092 units, a decrease of 5.2% from a year ago when adjusted for the same number of selling days.

“Despite buoyant market fundamentals, auto sales are being pulled back by lower incentives,” said Oliver Strauss, Chief Economist for ALG, a subsidiary of TrueCar. “SAAR however has fluctuated in 2019 more than in previous years, pointing to some uncertainty about the remainder of the year.”

Additional Takeaways & Trends: (Forecasted by ALG)

  • Despite industry sales being down year-over-year, Hyundai had a strong month, up 6.2%. Trends on the TrueCar platform indicate that Hyundai is increasingly winning over new car buyers who are cross-shopping other brands, particularly buyers who are also considering Toyota and Subaru models.
  • Tesla continued its sales ascent, up 67.5% year-over-year driven by Model 3 sales.
  • Automaker average incentive spend will reach $3,671, down 2.6% or $97 dollars year-over-year, and down 4% or $151 from June 2019. The most notable declines in incentive spend will come from Kia, down 17.8%, Toyota, down 9.3%, and Subaru, down 9.1% year-over-year. Meanwhile Honda raised incentives by 4.2% and BMW by 3.4%.
  • Average transaction price (ATP) should continue to rise, up 2.7% or $897 year-over-year.
  • Incentives as a percentage of average transaction price are expected to be 10.8%, down 5.1% from a year ago and down 2.8% from June 2019.
  • Volkswagen and Mercedes stood out this month in ALG’s brand strength metric for mainstream and luxury brands respectively, largely driven by new or redesigned product. Volkswagen’s Tiguan received a major refresh for 2019 and the Atlas was added as a new model to the Volkswagen line-up. Mercedes was buoyed by the all-new GLE SUV and its new entry level, A-Class Sedan.
  • Used vehicle sales for July are expected to reach 3,331,762 down 0.8% year-over-year and flat from June 2019.

“With a tightening of consumer demand and automaker incentives, savvy car buyers are likely holding out in anticipation of better deals or widening their consideration set to get the most value,” said Eric Lyman, Chief Industry Analyst at ALG, a subsidiary of TrueCar. “Hyundai has been a prime example of this trend, they’ve been able to capture sales in a declining sales environment by attracting shoppers from other brands.”

Retail Health Index (Forecast)

RHI measures the changes in retail market share relative to changes in incentive spending and transaction price to gauge whether OEMs are "buying" retail share through increased incentives, or whether share increases are largely demand-driven.  An OEM with a positive RHI score is demonstrating a healthy balance of incentive spend relative to market share, either by holding incentive spending flat and increasing share or by increasing incentives with a higher positive increase in retail share.

ALG's Retail Health Index - Mainstream

ALG's Retail Health Index - Luxury

July 2019 forecasts for the 13 largest manufacturers by volume: (Adjusted for same selling days as July 2018. Tesla forecast included since March 2019.)

Total Unit Sales

Manufacturer July 2019 July 2018 YoY %
BMW 27,667 26,410 0.6%
Daimler 24,417 23,058 1.7%
FCA 169,540 170,970 -4.8%
Ford 188,532 192,743 -6.1%
GM 229,755 221,437 -0.4%
Honda 141,147 138,602 -2.2%
Hyundai 57,231 51,752 6.2%
Kia 57,227 53,112 3.4%
Nissan 101,426 108,792 -10.5%
Subaru 60,302 59,426 -2.6%
Tesla 16,222 9,300 67.5%
Toyota 203,495 208,770 -6.4%
Volkswagen Group 56,175 54,070 -0.3%
Industry  1,385,568  1,370,405 -2.9 %

Incentive Spending (Per Unit)

Manufacturer July 2019     July 2018 YOY %
BMW $5,981 $5,783 3.4%
Daimler $5,388 $5,267 2.3%
FCA $4,679 $4,458 4.9%
Ford $4,528 $4,629 -2.2%
GM $5,058 $4,948 2.2%
Honda $2,017 $1,935 4.2%
Hyundai $2,716 $2,946 -7.8%
Kia $3,543 $4,313 -17.8%
Nissan $3,904 $4,068 -4.0%
Subaru $1,473 $1,621 -9.1%
Toyota $2,388 $2,633 -9.3%
Volkswagen Group $3,562 $3,839 -7.2%
Industry $ 3,671 $ 3,768 -2.6 %

Average Transaction Price (ATP)

Manufacturer July 2019 July 2018 June 2019 YOY %
BMW $54,679 $51,391 $55,542 6.4% -1.6%
Daimler $57,411 $55,794 $58,809 2.9% -2.4%
FCA $36,310 $34,558 $36,125 5.1% 0.5%
Ford $38,125 $36,800 $37,715 3.6% 1.1%
GM $37,122 $36,553 $37,806 1.6% -1.8%
Honda $28,056 $28,264 $28,085 -0.7% -0.1%
Hyundai $24,409 $22,020 $23,004 10.8% 6.1%
Kia $23,698 $22,551 $24,123 5.1% -1.8%
Nissan $26,881 $26,931 $27,095 -0.2% -0.8%
Subaru $29,153 $28,551 $29,180 2.1% -0.1%
Toyota $32,274 $31,825 $32,588 1.4% -1.0%
Volkswagen Group $40,562 $39,895 $42,524 1.7% -4.6%
Industry $ 34,043 $ 33,146 $ 34,441 2.7 % -1.2 %

For additional data visit the ALG Newsroom.

(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 TrueCar
TrueCar, Inc. (NASDAQ: TRUE) is a digital automotive marketplace that provides comprehensive pricing transparency about what other people paid for their cars and enables consumers to engage with TrueCar Certified Dealers who are committed to providing a superior purchase experience. TrueCar operates its own branded site and its nationwide network of more than 16,500 Certified Dealers also powers car-buying programs for some of the largest U.S. membership and service organizations, including USAA, AARP, American Express, AAA and Sam's Club. Over half of all new car buyers engage with the TrueCar network during their purchasing process. TrueCar is headquartered in Santa Monica, California, with an office in Austin, Texas.

For more information, please visit www.truecar.com, and follow us on Facebook or Twitter. TrueCar media line: +1-844-469-8442 (US toll-free) | Email: pressinquiries@truecar.com

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.

TrueCar and ALG PR Contact:
Shadee Malekafzali

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