Ford Motors finally reported their December and 4Q sales, so the tallying is complete; the total for 2019 is 17,108,156, which is down 1.2% for the year. CC is going to do a number of posts this week looking at some of the more interesting stories that the numbers tell, but let’s kick off with the numbers overall by manufacturer, and take a look at what is always one of the most important numbers of all: incentives.
source: autonews.com
No commentary from me on the overall numbers, as we’ll get to some of those later.
Incentives are of course the key driver of both volume and profitably. Manufacturers want to keep their plants running at or near optimal utilization, and incentives is how that’s done, in lieu of strong retail demand. Not surprisingly, incentives (an average of $4,600) were up in December 2019, by 6.9%. That represents 11% of MSRP, the highest since the 2008-2009 recession.
Meanwhile, the average transaction price of a new vehicle in 2019 was $36,602, up $673 from 2018, thanks to continued increases in the sale of more expensive trucks, CUVs and SUVs. And of course the increased use of seven year loans.
That ad looks like it might be from a Florida dealer group. If so, you can add an additional $1000 ‘dealer fee’ to the final, out-the-door price.
I was confronted by the “document and prep fee” if $1100 when I bought my Golf. I told them I have never paid it, that I will fill out the papers for them and the PDI had already paid for “prep.”
I then proceeded to negotiate $1000 off for the manual transmission and another $1000 for the end of the year. The icing on the cake was 0% for 72 months. Since my business owns my car, it’s like getting free vehicle.
if it pans out, so much for Nissan reducing incentives amid its collapse in sales
Holy crap, no way can I afford a desirable new car with prices so high and high monthly payments to boot. A few of my neighbors have new Mitsubishis, but I rather not.
Mitsubishi, eww, yuck, bleh!
For small money you can have a Kia and a five year warranty.
Well the new Elantra looks sharp or there is a Tuscon. The 2020 Accent feels cheaper than my 1993 Camry and the Accent foolishly changed their oil filter design for 2020.
I was confronted by the “document and prep fee” if $1100 when I bought my Golf. I told them I have never paid it, that I will fill out the papers for them and the PDI had already paid for “prep.”
I then proceeded to negotiate $1000 off for the manual transmission and another $1000 for the end of the year. The icing on the cake was 0% for 72 months. Since my business owns my car, it’s like getting free vehicle.
In California, the doc fee is limited by state law to $55. That encourages dealers to blatantly and explicitly tack on “additional dealer markup” on a dealer sticker next to the factory sticker, though that is mostly a thing of the past.
It really surprises me that there are places where they regularly have doc fees of $1k or so. And it isn’t just on new cars it happens on $5-6k cars too where it represents a significant bump in the out the door price.
In my state it is limited to $150 and they are required to include that it is negotiable in their advertising.
Personally I negotiate the total out the door price, I don’t care how they add it up, just what it adds up to.
The interesting thing is how Tesla is doing. With new factories coming online in both Europe and China, we are going to see some big numbers. I saw loads of them in California recently and many, many car transporters filled with Model 3s.
FCA cars are dead in North America. The RAM brand will remain but the cars are ancient. I drove a 300 over the Rockies last summer and it is really past its best before date. Long past, in fact.
Fiat down 41% for the year, yikes! Alfa down 23%. The future of my local Fiat/Alfa studio is not bright. Hope an independent Fiat shop trains an EV technician.
GM fanboi that I’ve always been, I’m glad to see their incentives DOWN – a sign that the vehicles themselves, overall, are increasingly desirable in the marketplace and therefore don’t need as much in rebates to move their metal.
(Note their slide in sales is right in line with everyone else)
Of course we’re only looking at one month so maybe what I’ve written here isn’t the case…
Are the incentive figures for sales only? About 1/3 of US new vehicles are leased. Are cheap leases counted too? Sure can be a big incentive.
Sorry, but I can’t answer that. Undoubtedly they are incentivized too.
Yeah I’d be interested to know how those numbers are calculated. Leases are big and they are often subsidized by the mfg, either with a lower than market money factor or on the back end with a higher residual value.
I don’t think I fully realized that Jeep is the 6th most often sold nameplate in the U.S. That’s quite astounding. Or in other words that for every 19 vehicles sold of any brand, at least one is a Jeep.
Yes, Jeep has been on a roll of late. Only the following makes, in order, are ahead: Ford, Toyota, Chevrolet, Honda, and Nissan.
50 years ago, if you had predicted this, people would have said you were crazy!
BTW, does anyone know the last time Chevy outsold Ford?
From what I’ve found poking around the internet, it was 2007. But someone may have more up-to-date figures.
Nissan’s sales are down because
A) The folks who normally shop Nissan are more economically stressed. Same with Mitsubishi. A pulse, a job and a 650+ credit rating don’t go as far as it used to.
B) They stopped making the $13,000 Versa and are now selling a $17,000 Versa. A new car for $12,000 with the warranty security and a guaranteed non-hooned past was tempting. A thousand more than that Versa gets you into a Fit or Yaris iA.
Look at the decline in sales in July 2019 and after
So how does that theory work when Mitsubishi increased their sales both in December year as well as for the year as a whole?
If anything the people who may have shopped a “supposed” rung higher may be turning more conservative with their money and would then look at their offerings. People stop buying fur coats but they keep buying Tide…
In regards to the chart you included Nissan Versa is down because they stopped building the hatchback in the spring if I am not mistaken. Can’t sell what you don’t build.
They did stop making the hatchback in April, but kept making the sedan. I see your point 🙂 They intended for the Kicks to replace the Note. I’ll have to see if Kicks sales went up. They did, from 23,000 in 2018 to 58,000 in 2019. Maybe it cannibalized Versa sales?
Nissan/Mitsubishi had a similar drop in sales to Nissan/North America if I’m understanding the chart correctly. Did I look at it wrong?
The Kicks is a pretty decent little CUV, it seems a tremendous value once you get over the fact that it’s kind of a lifted Versa but since that’s what sells it can make more money and it’s in line with the competition. It’s undoubtedly much more profitable per sale.
There are teh following brands in the chart:
Infiniti
Nissan
Mitsu
Nissan NA is Nissan plus Infiniti
Nissan/Mitsu is Nissan plus Infiniti plus Mitsubishi, a little confusing but the various numbers add up correctly. It’d be less confusing if the chart called it out as “Nissan NA/Mitsu”
The similar drop is due to Nissan being used in both sets of numbers. Look a few rows higher and you’ll find Mitsu by itself along with Nissan and Infinity by themselves too. Then combine them in various ways to make the groupings.
Note those incentive numbers are what was forecast for Dec, not the actual numbers, not sure how AN came up with those numbers but they are at best a well educated guess. Also they are Dec only and not full year averages which in my opinion, is a better indication of how an automaker is doing. Dec is the month of incentives, Lexus usually has a big ad spend on their December to Remember sales event every year. Many mfgs do try to limit the number of 2019s that are still in inventory on Jan1st. So did a mfg have low incentives throughout the year and are only bumping them up this Dec to clear out what remains, or has the incentive spend remained steady through out the year, or in fact are lower in Dec19 than they were in Jan-Nov19 even if Dec19 was higher than Dec18.
This of course is one of the reasons that certain automakers have gone to quarterly reporting. At least that way you look a 1/4 of the picture instead of just 1/12.
GM US is almost at parity with GM China again in volume. Reuters reports that GM sales in China have contracted to 3.09 million vehicles in 2019 which was a drop from 3.65mil in 2018 and 4.04mil in 2017. Note that this rate of decline is greater than the overall market decline in China (8% for 2019 and 3% for the year earlier) and is noted to be in large part due to more competition in the mid-priced SUV segment.
Kicks? Versa?
More like “ICKS” and “WORSA”!
I thought all this dry data could use a comic break…
I had a Versa Note for two weeks as a rental while the wife’s car was having the fire damage repaired. Hated the CVT, absolutely loved the car otherwise. As I’m looking for a frugal commuter this spring, if I could get one of these with a manual in other than penalty box trim, it’d be my top of the pile ICE alternative. This is how a cheap car should be made. Other than the transmission.
I see those numbers and the prices of today’s cars and I have to wonder. Wonder because a $3000 full size truck in 1967 would be an inflation adjusted $23,000 today but you can’t find such a truck. Chicken or egg? Prices up because of big improvements or 7 year loans?
Same for cars to some extent. However I just checked on the cost of a 1986 Mazda GLC to a 2018 Mazda 3. Roughly around $7800-8000 in 86 and now $18K last year. I paid $18K for a Mazda 3 sedan last year so I am happy about that. I don’t know how long cars can keep outpacing inflation. I guess as long as banks will give out 7, 8, 10 year loans.
Well the buyers of trucks are certainly different today than they were in 1967 and of course today’s trucks are significantly different too.
The other thing to consider is that every month is truck month since the MSRP is inflated just so they can offer those big discounts.
The MSRP of the cheapest F-150 is $28,495 while my state’s contract price is $21,249. Over at GM the Silverado starts at $28,300 but my state can buy them by the truck load for $23,830. You might not be able to do quite as good as a state bid, but significant discounts for the retail buyer are available. Ram 1/2 tons apparently didn’t make the cut, or the dealer only bid 2500’s
And that stripper 1/2 ton of today has so much more standard, PS, PB, AT, AC, AM/FM meant a fully loaded truck back in the day. Not to mention all the other advancements of the last 50 years.
Yep.
It would have taken two vehicles in 1967 to do what that Ram in the ad can do today. But if you still want a basic truck, they are fairly easy to find for just over $20K.
I got my XLT for $17K off MSRP. That was an exceptional end-of-year deal I had to drive over 250 miles to get, but $12-14K is fairly common year round.
It can be a blurry line separating “needs” vs. “wants” , but nobody needs to want to spend $36K on a new car. Just a for instance: glancing at Autotrader I see new Mustangs going for ~$23K (ok, it’s the 310 horsepower four, not the V8…needs vs. wants)