This Week in Car Buying: April sales drop; Transaction prices climb; Maserati launches CPO program; 2018 GMC Terrain priced
Vehicle sales slumped for the fourth month in a row, dropping nearly 5 percent over April sales a year ago. Cars continue to take the big hit as volume dropped 11 percent, while trucks sales were only down by 0.1 percent. At the current sales rate, industry volume dropped below the 17 million mark after three straight years of topping that level.
While the industry has yet to adjust production downward to compensate for the slack demand, it continues to pump up incentives in an effort to slow the decline. That means there will be plenty of deals for smart shoppers during May, especially as makers gear up for the traditional Memorial Day sales blitz. Average incentive spending is closing in on $4,000 per vehicle.
Among major Detroit-based makes, Ford posted the largest drop of 7.1 percent, followed by Fiat Chrysler Automobiles at 6.6 percent and General Motors at 5.8 percent. Import brands also saw sales declines including drops of 7 percent at Honda, 4.4 percent at Toyota and 1.5 percent at Nissan.
Volkswagen actually saw its sales increase by 1.6 percent, aided by government approval to again sell 2015 Golf and Jetta diesel models that were kept off the market when the emission cheating story broke. Those vehicles accounted for about 12 percent of the German make’s April sales. Before the scandal came to light, vehicles equipped with diesel powerplants accounted for as much as 25 percent of VW’s total sales.
Also in the plus column for April was Subaru, which saw its volume grow by nearly 4 percent. Subaru is looking to set its ninth consecutive year of record sales.
Transaction prices still climbing
Despite higher incentives and bigger discounts, the average transaction prices for new light vehicles continue to climb, according to Kelley Blue Book data. Even as sales dropped 4.7 percent, the ATP actually rose 1.7 percent or $579 year-over-year in April. While the average is higher than a year ago, the most recent figure is down $48 or 0.1 percent from March. April’s ATP stands at $34,552.
“While new vehicle sales appear to be on the decline, most manufacturers are seeing higher retail transaction prices, with the industry average on new-car prices up for the month by nearly 2 percent,” said Tim Fleming, analyst for Kelley Blue Book. “These increases appear to be primarily driven by the shift in demand toward SUVs, even as growing segments, such as subcompact SUVs and luxury compact SUVs, seeing year-over-year price declines. Kelley Blue Book anticipates average transaction prices will likely begin to decrease when the sales mix of SUVs eventually levels off.”
By manufacturers, Nissan saw its average transaction price grow by 6.3 percent followed by FCA (up 3.3 percent) and Ford (up 3.2 percent). FCA’s growth came from higher average prices on Chrysler Pacifica minivans, while the sales of heavily discounted and discontinued Chrysler 200 sedan peter out. Pacifica also contributed the minivan segments 3.3 percent growth in ATP. Entry level luxury cars also showed some strength, with average prices growing 2.9 percent year over year. The biggest decline in ATP was recorded by hybrid/alternative energy cars, which dropped by 4.4 percent to $26,307.
Maserati launches CPO program
As Maserati expands its product lineup, moving into the SUV market with Levante, it is also expanding its dealer services by launching a Certified Pre-Owned program for used vehicles. Called Officine Maserati Certified Pre-Owned Program, the new offering includes an unlimited mileage 2-year warranty for used Maserati vehicles that qualify. Units selected for the program undergo a 120-point comprehensive inspection process that included reconditioning to Maserati standards.
The Italian make also checks each vehicle’s history, with recommended service brought up to date. As an added bonus, Maserati is giving a 3-month free subscription to SiriusXM radio for all CPO and Pre-Owned vehicles.
2018 GMC Terrain priced
GMC has announced pricing on its all-new 2018 Terrain which goes on sale this summer. The compact crossover SUV will start at $25,970. The Terrain will be offered in front- and all-wheel drive with a choice of three powertrains: a 170-horsepower 1.5-liter turbocharged 4-cylinder standard and an optional a 252-horsepower 4-cylinder gasoline engines mated to a 9-speed automatic transmission; or an optional 137-horsepower 1.6-liter 4-cylinder diesel with a 6-speed automatic.
The Terrain will be available in SL, SLE, SLT and Denali trim levels. The base $25,970 SL model is front-drive only. The front-drive SLE model starts at $28,795 for gas power and $30,545 for the diesel, while the front-drive SLT begins at $32,295 for gas and $34,045 for diesel. The top line Denali version, starts at $38,495 for front-drive. All-wheel drive adds $1,750 to all models except the SL, where it is unavailable. All prices include $975 destination.
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