New vehicle average transaction pricing has been on the decline for nearly a year now, which was largely expected following a long period of record-setting increases. With inventory swelling and sales declining, this has prompted automakers to begin ramping up incentive spending in an effort to move vehicles, resulting in those aforementioned declines. However, this hasn’t applied to every automaker, as Ford Motor Company ATP actually increased in August.
According to new data from Cox Automotive, Ford Motor Company average transaction pricing increased by 1.4 percent from $55,815 in July to $56,599 in August, a difference of $784, a figure that’s also 0.4 percent higher than August 2023’s ATP of $56,354. The Ford brand saw its average transaction price grow by 1.2 percent or $688 to $56,022, while Lincoln’s ATP increased by a more marginal 0.7 percent or $439 to $66,668.
These figures go largely against the grain of the overall new vehicle market, as it 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. This 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 buyer’s 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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