TrueCar’s ALG Forecasts New Car Auto Sales to Rise in August Bolstered by Labor Day Weekend
August 28 2019 - 09:00AM
TrueCar, Inc.’s (NASDAQ: TRUE) data and analytics subsidiary, ALG,
projects total new vehicle sales will reach 1,602,276 units in
August, up 4.2% from a year ago when adjusted for the same number
of selling days. For 2019, August sales include the entirety of
Labor Day Weekend sales, while August 2018 only included up to the
Friday prior to Labor Day Weekend, giving August 2019 a sales
advantage. 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 1,402,687 units, an increase of 3.1%
from a year ago when adjusted for the same number of selling days.
“Despite heavy chatter and speculation about the trade war and
the future of the economy that’s stoking uncertainty, the
fundamentals including employment and wages are performing well and
having a positive impact on auto sales,” said Oliver Strauss, Chief
Economist for ALG, a subsidiary of TrueCar.
Additional Takeaways & Trends: (Forecasted
by ALG)
- BMW stood out this month for sales growth, expected to be up
16.8% on total vehicle sales and 18.1% on retail sales
year-over-year. Trends on the TrueCar platform indicate strong
performance from their SUVs including the all-new X7, which has
quickly risen to be the number two best-selling model in the
premium Fullsize Utility segment since launching earlier this
year.
- Tesla’s sales ascent is expected to continue, up 12.5%
year-over-year, however growth softens compared to previous months
as Model 3 sales ramped up significantly starting in August
2018.
- Automaker average incentive spend should reach $3,825, up 1.2%
or $45 dollars year-over-year, and down 2.2% or $85 from July 2019.
The most notable declines in incentive spend are expected from Kia,
down 12.7%, Hyundai, down 9% and Ford, down 6.9%. Meanwhile Honda
is expected to raise incentives by 15.8%, FCA, up 9%, and GM, up
8.8%.
- Average transaction price (ATP) should continue to rise, up
2.1% or $702 year-over-year.
- Incentives as a percentage of average transaction price are
expected to be 11.2%, down slightly at 0.9% from a year ago and
down 1.9% from July 2019.
- Hyundai, Kia, Volkswagen, Mercedes, and BMW all stood out this
month in ALG’s Retail Health Index (RHI) brand strength metric.
This was largely driven by new, redesigned, or strong performing
SUV product including the Hyundai Palisade, Kia Telluride,
Volkswagen’s Atlas and Tiguan, Mercedes’ GLE and BMW’s all-new
X7.
- TrueCar and ALG also assessed brand retention performance
through the replacement vehicle indicated via TrueCar’s consumer
trade experience.○ RAM had the highest indicated brand retention at
44%. This is up significantly from 36% last year which ranked them
10th.○ Honda ranked 2nd at 41% indicated brand retention which was
on par with last year.○ Subaru ranked 3rd at 40%, up from 9th last
year.○ Lexus and Chevrolet ranked 4th and 5th respectively.○ The
average indicated retention across all brands was 32%.
- Used vehicle sales for August are expected to reach 3,350,362
down 0.2% year-over-year and flat from July 2019.
“ALG’s Retail Health Index is revealing some interesting trends
across the industry,” said Eric Lyman, Chief Industry Analyst for
ALG, a subsidiary of TrueCar. “Luxury brands are showing an
increasing reliance on incentives to maintain sales, brands with
fresh Midsize Utility products are leading Retail Health Index
performance in both mainstream and luxury sectors, and elevated
incentive spending in the Fullsize Pickup segment is negatively
impacting Retail Health Index scores for truck-heavy domestic
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.
August 2019 forecasts for the 13 largest manufacturers
by volume: (Adjusted for same selling days as August 2018.
Tesla forecast included since March 2019.)
Total Unit Sales
Manufacturer |
Aug 2019 |
Aug 2018 |
YoY % Change |
BMW |
33,570 |
27,719 |
16.8% |
Daimler |
27,883 |
24,192 |
11.1% |
FCA |
209,155 |
193,718 |
4.1% |
Ford |
209,586 |
217,700 |
-7.2% |
GM |
280,567 |
238,574 |
13.4% |
Honda |
165,617 |
147,903 |
8.0% |
Hyundai |
66,180 |
57,542 |
10.9% |
Kia |
59,489 |
53,864 |
6.5% |
Nissan |
118,990 |
112,376 |
2.1% |
Subaru |
71,558 |
64,088 |
7.7% |
Tesla |
11,670 |
10,000 |
12.5% |
Toyota |
232,440 |
223,055 |
0.5% |
Volkswagen Group |
60,019 |
57,505 |
0.6% |
Industry |
1,602,276 |
1,482,268 |
4.2% |
Incentive Spending (Per Unit)
Manufacturer |
Aug 2019 |
Aug 2018 |
YOY %
Change |
BMW |
$5,816 |
$5,428 |
7.2% |
Daimler |
$5,589 |
$5,855 |
-4.5% |
FCA |
$5,043 |
$4,625 |
9.0% |
Ford |
$4,415 |
$4,741 |
-6.9% |
GM |
$5,133 |
$4,720 |
8.8% |
Honda |
$2,236 |
$1,931 |
15.8% |
Hyundai |
$2,693 |
$2,960 |
-9.0% |
Kia |
$3,461 |
$3,966 |
-12.7% |
Nissan |
$4,167 |
$4,381 |
-4.9% |
Subaru |
$1,560 |
$1,507 |
3.5% |
Toyota |
$2,641 |
$2,590 |
2.0% |
Volkswagen Group |
$3,844 |
$3,745 |
2.7% |
Industry |
$3,825 |
$3,780 |
1.2% |
Average Transaction Price
(ATP)
Manufacturer |
Aug 2019 |
Aug 2018 |
July 2019 |
YOY % change |
MOM % change |
BMW |
$53,337 |
$51,500 |
$55,542 |
3.6% |
-1.2% |
Daimler |
$57,216 |
$55,668 |
$58,809 |
2.8% |
-0.4% |
FCA |
$36,505 |
$34,766 |
$36,125 |
5.0% |
1.1% |
Ford |
$38,165 |
$37,501 |
$37,715 |
1.8% |
-1.0% |
GM |
$38,135 |
$37,410 |
$37,806 |
1.9% |
1.7% |
Honda |
$28,102 |
$28,765 |
$28,085 |
-2.3% |
-0.7% |
Hyundai |
$24,644 |
$22,149 |
$23,004 |
11.3% |
0.3% |
Kia |
$24,057 |
$22,676 |
$24,123 |
6.1% |
2.0% |
Nissan |
$26,751 |
$27,000 |
$27,095 |
-0.9% |
-1.4% |
Subaru |
$29,113 |
$28,632 |
$29,180 |
1.7% |
-0.1% |
Toyota |
$32,322 |
$32,041 |
$32,588 |
0.9% |
-0.9% |
Volkswagen Group |
$40,059 |
$39,828 |
$42,524 |
0.6% |
-5.0% |
Industry |
$34,278 |
$33,577 |
$34,441 |
2.1% |
-0.2% |
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.)
TrueCar Trade data reflects consumers trading in a
vehicle and the percentage that chose the same brand
when indicating a replacement vehicle. The replacement
vehicle was not necessarily a new car. Data sourced Aug
2018 vs. Aug 1-26th 2019.
About TrueCarTrueCar, 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. Nearly
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 ALGFounded 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
Malekafzalishadee@truecar.com
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