Hyundai's updated Genesis coupe helped the maker drop incentives and demand higher prices in August.
While a number of key automakers have yet to report their final numbers for August, there’s little doubt it was a strong month for the industry, likely bringing an overall sales increase of around 16%, year-over-year – a sharp contrast to the stuttering numbers from other sectors of the economy.
The August numbers are all the more impressive when considered in light of the fact that incentive spending continued to drop during the month – while transaction prices were up sharply compared to August 2011.
“There’s still pent-up demand,” driving buyers back into showrooms, suggested Frank Trivieri, vice president of sales for Volkswagen of America, which reported a striking 62.5% year-over-year sales increase.
New products, like the 2013 Dodge Dart, help Chrysler pare back its incentives.
Volkswagen was one of the rare makers to raise incentives, from $1,843 in August 2011 to $2,568 last month, a 39.3% increase, according to data research firm TrueCar.com. Even then, its givebacks were down from July of this year and ran only slightly above the overall industry average of $2,457. That figure, in turn, was down from $2,506 in July, and $2,614 in August 2011, according to TrueCar.
The industry average was down 6.0 from August 2011, reported the firm, the fourth consecutive monthly decline.
Toyota, which is reporting a 45.6% sales gain for last month, nonetheless trimmed its August incentives to $1,904, down 21.2% year-over-year.
Hyundai, which already had the lowest incentives spending of any maker in the industry, dropped its givebacks by another 16.9%, to just $1,071. One reason may have been a potential shortage of products as the maker struggles to meet demand – especially in light of the strikes that have sharply reduced output at Hyundai’s Korean factories.
(Hyundai strikes end but maker lost 82,000 units of production. Click Here for that story.)
Even Chrysler, which has been at the high end of the incentives scale, paired back by 8.8% on rebates and other givebacks for the month – to an average $3,088 per vehicle.
“As we continue to refresh our product portfolio, you’ll see that number (continue to) shrink,” Chrysler CEO Sergio Marchionne said.
Other than Volkswagen, the only maker driving up incentives during August was Nissan, along with its Infiniti luxury brand. The maker averaged $2,904 per vehicle, a 4.7% increase year-over-year. But even there, Infiniti’s givebacks last month were down 8.4% from July, reported TrueCar.
Equally telling, the average transaction price, or ATP, which is what the typical motorist spends, rose 1.4% year-over-year, to $30,274 in August 2012, the data firm reported, based on data tracking using numbers from dealers across the U.S.
At $22,378, Hyundai and Sibling Korean carmaker Kia had record ATPs in August. The two brands also reported the biggest year-over-year increase, a 5.8% jump.
The highest average transaction price, meanwhile, was posted by Volkswagen, at $33,207 – the only maker to report a decline for the month, 0.7% compared to August 2011. General Motors was second, at $32,391, followed by Ford, at $32,196, according to TrueCar.
“The increase in transaction prices compared to last year while lowering incentive spending shows the strengthening demand for new vehicles and a positive sign for theautomakers’ bottom line,” said Jesse Toprak, senior analyst for TrueCar.com.