Heading into 2024 – with new vehicle inventory soaring back to normal levels, and in some cases, beyond – most expected new vehicle prices to fall. However, that hasn’t necessarily been the case, at least, for certain automakers and individual brands. In the month of August, pricing did indeed fall slightly, but Ford average transaction pricing bucked that overall trend and wound up rising just a touch compared to July, in fact.
According to new data from Cox Automotive, Ford average transaction pricing – for the brand, not including Lincoln – grew by 1.2 percent or $688 month-over-month in August, from $55,334 in July to $56,022, and was up a very tiny 0.1 percent compared to August 2023 – when Ford’s ATP came in at $55,963. Interestingly, this wasn’t the case with the overall market, which posted an August 2024 ATP of $47,870, which is 0.6 percent lower than July’s figure of $48,166 and a more significant 1.7 percent less than August 2023’s $48,569.
It is worth noting that August marks 11 consecutive months of year-over-year monthly decreases in average transaction pricing for new vehicles in the U.S., a trend that’s being driven by high inventory and increased incentive spending – the latter of which came in at 7.2 percent of ATP in August, versus 7.0 percent in July – its highest level since H1 2021. As for inventory, it grew by a whopping 40 percent year-over-year, though only certain brands are working to drive that number down by offering more incentives.
“In our latest dealer survey, the message about price pressure was very clear,” said Cox Automotive Executive Analyst Erin Keating. “Dealers are telling us the sales environment is humming along at a muted pace and there is growing pressure to lower prices, just as the overall cost index hit a new record high. In the face of a sluggish sales pace – 15.1 million in August – more dealers are pulling the only lever they have: higher incentives. This shift to a buyers’ market is good news for consumers but certainly impacts dealer profitability. Automakers are coming to the table with more incentives, but credit remains tight, putting more pressure on dealers to get creative with additional discounts and financing, affecting the bottom line.”
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