TrueCar’s ALG Forecasts New Car Auto Sales to Hit 17M SAAR for First Time in 2019 While Automakers Continue to Pull Back on Incentive Spend
SANTA MONICA, Calif.,
“The declines we’re seeing at the start of 2019 are not unexpected,” said Oliver Strauss, Chief Economist at TrueCar’s ALG. “Tariffs and the rising interest rate environment have made consumers a bit cautious; however, both the economy and the auto industry remain strong despite uncertainty about the future.”
While automakers have historically raised incentives in times of economic uncertainty, ALG expects OEMs to continue decreasing their incentive spend. Average incentive spending by automakers should reach an estimated
“Incentives are not as rich as they were last year,” said Eric Lyman, Chief Industry Analyst for TrueCar’s ALG. “That’s a sign of balance in the automotive space as automakers are better aligning production and incentive spend with consumer demand. GM’s Cadillac and Chevrolet brands are showing the largest improvements in ALG’s Retail Health Index leading the luxury and mainstream sectors respectively in March.”
ALGs Retail Health Index (RHI) assesses whether OEMs are gaining market share through consumer demand or through incentives.
Due to Tesla’s increased volume, ALG is now publishing a sales forecast for the brand alongside its other automaker forecasts.
“The eyes of the automotive industry are fixed on Tesla now that the brand is competing at a transaction price that is more in line with mass market vehicles following the launch of the Model 3,” said Lyman.
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.
Graphics accompanying this announcement are available at
Forecasts for the 13 largest manufacturers by volume:
Total Unit Sales (adjusted for same number of selling days as 2018)
|Manufacturer||Incentive per Unit
March 2019 Forecast
|Incentive per Unit
Average Transaction Price (ATP)
|March 2018||Feb 2019||YOY %
For additional data visit the ALG Newsroom.
(Note: This forecast is based solely on TrueCar’s analysis of industry sales trends and conditions and is not a projection of the company’s operations.)
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
Source: TrueCar, Inc.