October sales dropped only 1.1 percent year-over-year, but the sluggishness in some segments has manufacturers worried as they head into the holiday sales period. Although the market is off less than 2 percent year-to-date, manufacturers are expecting high incentives will stay in place through the balance of the year to maintain the current sales level.

While most makes posted modest gains of between 1 and 2 percent, among the larger brands, VW, Nissan and Ford saw the biggest jumps with respective increases of 12, 8.4 and 6.4 percent, largely on strong sales of crossovers and trucks. Hyundai saw a drop of 15 percent over last year’s numbers, while Fiat Chrysler Automobiles’ volume dropped 13 percent. Much of the FCA decrease was attributed to lower fleet sales, which dropped 43 percent from a year ago.

J.D. Power reported that incentives averaged $3,901 per vehicle in early October, up $66 over the previous record set a year earlier. Reflecting the higher incentive spending, it appears that sky high average transaction prices are beginning to stall out as Kelley Blue Book data shows only a 0.3 percent year-over-year increase ($101) to $35,263 for the month. ATP is up $128 (0.4 percent) from September.

“Transaction prices continue to rise at a slower pace than we’ve seen recently, expected to be just $100 higher than this time last year,” said Tim Fleming, analyst for Kelley Blue Book. “Prices were up just 1 percent after averaging 3 percent gains in the first half of the year. Flat transaction prices combined with ever-growing incentive spending signal headwinds for the new-vehicle market as 2017 nears its end.”

The biggest gain in average transaction prices by segment came from minivans, which saw a 7.6 percent increase since last October. That strong showing is attributed to the two newest entries in the category, the Chrysler Pacifica and Honda Odyssey. Meanwhile, electric vehicle ATP fell by the same percentage over the timeframe. Manufacturers are continuing to aggressively incentivize their EV offerings. Ford is giving as much as $17,500 in total cash in the Los Angeles and San Francisco markets for its Focus EV, while its C-Max Energi plug-in hybrid benefits from as much as $10,250 in incentives. Kia is offering up to $16,500 on its Soul EV, while Nissan has over $11,000 in lease cash on its 2017 Leaf S, which is clearing out in advance of the all-new 2018 Leaf intro.

EV tax credit cut proposed

As part of the tax cuts being proposed in Washington, lawmakers will be deciding on whether or not to ax the $7,500 federal tax credit on electric vehicles. Even as manufacturers scramble to meet California’s Zero Emission Vehicle mandate, which is also followed by 10 other states, the elimination of the subsidy could make that job even tougher.

Under the law, the first 200,000 electric or electric plug-in hybrids sold by manufacturers are eligible for the credit—some makers like Nissan, which has sold about that number, will soon come up against that limit even though conventional wisdom held that the subsidy would be continued. Now it appears that this tax credit may in fact be scrapped.

Automotive News reports that Xavier Mosquet, a senior partner at Boston Consulting, predicts “That will stop any electric vehicle market in the U.S., apart from sales of the highly expensive Tesla Model S. There’s no Tesla 3, no Bolt, no Leaf in a market without incentives.”

If the tax package is passed and signed into law, the credit would expire at the end of the 2017 tax year. This still gives buyers time to purchase an EV and apply for the break by April.

Ram ready to roll

The all-new 2019 Ram 1500 pickup is set to make its debut at the North American International Auto Show in Detroit next January and already the FCA unit is planning a dual track plan that will keep making the current 2018 Ram in a bid to unseat Chevy Silverado as the nation’s second best-selling pickup.

Automotive News reports that by keeping the current Ram in production, the company will have an additional 60,000 units of capacity. It hopes to keep the previous generation’s sales momentum up by offering attractive incentives. Through Oct. 1, Chevrolet has sold 418,590 Silverado pickups, which is down 1.6-percent, while Ram has seen a 3.8-percent increase in its pickup sales, hitting 374,901 units, well within striking distance given the boost in capacity.

By keeping the old truck in production, FCA hopes to keep volumes up even as it ramps up output of the new vehicle, which could take as long as six months to hit full speed. Plus, having fully amortized the tooling used for the current truck, Ram can either lower sticker prices or offer generous discounts to keep that model competitive in the marketplace.

“My expectation is that we’ll run the old installation at least for the whole of 2018,” FCA Chairman Sergio Marchionne told auto analysts. “Production capacity is confirmed, so it’s up to us to decide how long we run it.” He feels production can run indefinitely “as long as we see market needs not being satisfied by the overall production capacity.”

Volvo launches V90 special

To commemorate the beginning of the 2017/2018 Volvo Ocean Race, the Swedish maker has introduced the 2018 V90 Cross Country Ocean Race edition. The wagon will be available early next spring with a starting price of $60,500.

The all-wheel-drive wagon will be painted in a Crystal White exterior with matte gray and orange accents and be equipped with such unique features as additional power outlets, dirt- and water-resistant interior materials and an integrated, detachable spotlight. A total of 3,000 of the special units will be built globally with $116 of the purchase price going to the Volvo Ocean Race Science Program, which uses the sensors on the racing boats involved in the global event to measure the health of the world’s oceans.

The rundown

At the Specialty Equipment Market Association trade show in Las Vegas, Lexus took the wraps off the 2018 Lexus LC500 Inspiration Series. These 100 coupes have a Marvel Comics theme.

Halloween was a coming out party of sorts for the all-new 2018 Jeep Wrangler. FCA released the first images that can be seen here.

SEMA was also a showcase for the 2018 Mini Cooper Hardtop Ice Blue Edition. This handsome hardtop is available in both Cooper and Cooper S trim levels.

In the market for a new car? Explore these useful tips on how to get the best deal:

Kelley Blue Book’s Complete Guide to Incentives

All you need to know about leasing

Which dealer services are right for you?

What to look for in your next economy car

What you need to know about conditional rebates

New Car Spotlight


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