TrueCar’s ALG Forecasts New Car Auto Sales Increase for the Third Quarter; Annual SAAR Remains on Pace for 17M Units
SANTA MONICA, Calif.,
“Despite a slight rebound in consumer confidence in September, overall auto sales are expected to decline given that Labor Day weekend fell into August this year,” said Oliver Strauss, Chief Economist for ALG, a subsidiary of TrueCar. “Nevertheless, the third quarter was up and auto sales remain on pace to hit 17 million units for 2019 aided by more fleet and incremental incentives.”
Additional Takeaways & Trends: (Forecast by ALG)
- Hyundai stood out for sales growth up 9.2% for total unit sales and 7.5% for retail sales year-over-year, continuing to see strong performance in its all-new Palisade model.
- Despite having no product launches, Honda is also expected to be up 7.4% on total vehicle sales and 6.6% on retail sales year-over-year, aided by strong Civic performance as well as increased incentive spend and fleet sales.
- Tesla continues to show strong sales growth, up 26.7% in total units year-over-year spurred by enduring popularity of its Model 3.
- Automaker average incentive spend should reach
$3,975, up 4.9% or $184 dollarsyear-over-year, and up 0.3% or $12from August 2019. The most notable declines in incentive spend are expected from Daimler, Hyundai, and BMW. Meanwhile Subaru, GM, and Honda are expected to have double-digit incentive increases.
"Subaru has long been an all-star when it comes to incentives discipline, and while the YOY spending is up nearly 50%, with an aging portfolio and new entries in hyper-competitive segments, the brand is still performing as the industry's MVP with regard to vehicle discounting," said Eric Lyman, Chief Industry Analyst at ALG, a subsidiary of TrueCar.
- Average transaction price (ATP) should continue to rise, up 2% or
$672year-over-year. ATP is expected to increase for the 9th consecutive month this year when compared to the prior year.
- Incentives as a percentage of average transaction price are expected to be 11.5%, up 2.8% from a year ago and down 0.8% from
- In ALG’s brand strength metric, Retail Health Index (RHI), BMW and Mercedes-Benz stood out, driven by lower incentives and strong new product performance in the BMW X7, Mercedes-Benz GLS and CLS.
- Used vehicle sales for September are expected to reach 3,415,427 up 3.4% from a year ago and up 0.1% from
"Mercedes-Benz and BMW are growing retail share while simultaneously pulling back on incentives, a feat that is boosting performance in our Retail Health Index,” added Lyman. “Historically, these German rivals kick their sales efforts into overdrive in Q4, but new product, rather than discounting, could be the catalyst for strong market performance as we enter the final stretch of 2019."
- Retail unit sales for the third quarter should reach 3,767,621, down 3.1% compared with the same period last year adjusted for the same number of selling days.
- TrueCar and ALG also assessed brand retention performance through the replacement vehicle indicated via TrueCar’s consumer trade experience for Q3.
- Toyota had the highest indicated brand retention at 43%. Honda and Chevrolet tied for second at 42% followed by Subaru at 40% and Ram at 37%.
- At the model level, the Chevrolet Corvette had the highest indicated brand retention at 49% followed by the Subaru Forester and the Jeep Wrangler Unlimited each with 29%.
- Used vehicle sales for the third quarter are expected to reach 10,260,316 up 1.8% year-over-year and down 3.9% from Q2 2019.
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.
Total Unit Sales
|Manufacturer||Sept 2019||Sept 2018||YoY % Change|
Incentive Spending (Per Unit)
|Manufacturer||Sept 2019||Sept 2018||YOY % Change|
Average Transaction Price (ATP)
|Manufacturer||Sept 2019||Sept 2018||Aug 2019||YOY % change||MOM % change|
Total Unit Sales Third Quarter
|Manufacturer||Q3 2019||Q3 2018||YoY % Change|
Retail Market Share Third Quarter
|Manufacturer||Q3 2019||Q3 2018||YoY % Change|
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
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
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Source: TrueCar, Inc.