TrueCar’s ALG Forecasts New Car Auto Sales to Rise in August Bolstered by Labor Day Weekend
SANTA MONICA, Calif.,
“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
- Automaker average incentive spend should reach
$3,825, up 1.2% or $45 dollarsyear-over-year, and down 2.2% or $85from 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
- 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
- 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
“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.
Total Unit Sales
|Manufacturer||Aug 2019||Aug 2018||YoY % Change|
Incentive Spending (Per Unit)
|Manufacturer||Aug 2019||Aug 2018||YOY % Change|
Average Transaction Price (ATP)
|Manufacturer||Aug 2019||Aug 2018||July 2019||YOY % change||MOM % 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.