Over four consecutive years of year-end sales, automakers have
offered minimal discounts to prospective customers as they
looked to cash in on new vehicle demand, helping dealers clear
inventory.
However, the average transaction price (ATP) for new vehicles in
November 2023 fell 1.5% to $48,247 from a year ago, according to
data from Kelley Blue Book. The ATP was $39,203 for the same
period in 2019.
Additionally, inventory levels are currently at their highest
since the early spring of 2021, leaving dealers and automakers
scurrying to make way for new models, which are set to pour in
by January.
Automakers have already started offering incentives and lowering
transaction prices to get more buyers to snap up new vehicles.
"New-vehicle sales incentives were up 136% year over year in
November, indicating the new-vehicle market is shifting to a
buyer's market, not a seller's market," Cox Automotive said in a
report. Average incentives are currently hovering around the
$2,500 mark.
Stellantis-owned Jeep held the highest inventory at 128 days at
the beginning of December, according to Cox Automotive.
Before the pandemic 60 to 65 days' supply was "normal" for the
industry, although some brands like Toyota Motor and Honda
typically work with lower supply.
Jeep is now offering its Gladiator truck and Compass crossover
with discounts of $8,257 and $5,851, respectively, on their
sticker prices.
Brands such as Kia, General Motors' Chevrolet, Mercedes and
Hyundai have begun offering vehicles with some discounts during
the holiday season.
New vehicle prices had surged to an all-time high over the past
few years, nudging some prospective customers to even consider
used options.
As a result of the higher vehicle prices, automotive retailers
and carmakers raked in lofty profits over the past few years,
despite fewer units sold.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shailesh
Kuber)
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