WESTLAKE VILLAGE, Calif.: 13 October 2014 — The health of the U.S. auto industry has traditionally been determined by the volume of new vehicles sold each month, yet price performance is also an important measure to consider, according to an analysis by J.D. Power.
The U.S. market is strong when using sales as a measure, with new-vehicle retail sales through the first nine months of 2014 at their highest level since 2005. Simultaneously, the industry has also enjoyed unprecedented growth in the average transaction price of new vehicles, rising to more than $29,600 thus far in 2014 from $25,700 during the same period in 2009, according to the Power Information Network® (PIN) from J.D. Power. The combination of increasing sales and transaction prices means that the value of retail vehicles purchased in 2014 is poised to be the highest on record at an estimated $407 billion.
“When defining success in the auto industry, whether it is for a specific segment, manufacturer or model, it’s important to look beyond basic sales figures,” said Thomas King, vice president of PIN. “With the rapid growth of average transaction prices over the past few years, success needs to be defined more broadly to include overall revenues in addition to sales volumes.”
For example, not all vehicle segments have performed equally, with some delivering stronger volumes and lower price growth and others greater price growth and weaker sales. Retail sales in the large pickup segment through September 2014 are up 4.6 percent compared with the same period in 2013, while retail sales overall have increased by 5.7 percent. However, the average retail transaction price of large pickups has risen by $2,700 or 7.5 percent year over year, while the industry has averaged only a $670 or 2.3 percent increase.
“From a sales perspective, large pickups have grown slightly slower than the industry overall, but from a price perspective they have significantly outperformed the industry,” said King.
In contrast, compact SUVs have demonstrated exceptional retail volume growth, up 22.1 percent thus far in 2014, compared with the first nine months of 2013, but the average transaction price for models in the segment have increased by an average of $150 or 0.6 percent.
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