Edmunds.com Predicts Average Transaction Price DeclinesBy Bill Visnic March 18, 2010
It's definitely not what a battered auto industry wants to hear after months of scrabbling for the start of a rebound, but analysts at Edmunds.com project, through the new True Market Value Predicted Price Trends metric -- that average transaction prices, even for plenty of usually strong-selling models, will fall in April.
Common sense might suggest with improving weather and the coming of spring that auto sales would tend to start increasing in April, but historically, such is not the case. Analysts at Edmunds.com note that in just the past eight years, sales have declined in April from March in seven of those years. Hand-in-hand with a decline in sales volume comes a typical reduction in average transaction prices during April.
April also is a poor springboard for auto sales because there are no long holiday weekends and the month holds, for many, the ominous prospect of filing tax returns.
Average transaction prices also will decline in April, said Jessica Caldwell, director of pricing and industry analysis, because it is the nature of the auto market to trend downward for most of the year. Prices uptick for the summer months but then resume a mostly downward path for the rest of the year.
Luxury To Decline -- and the Toyota Effect
Caldwell said Edmunds.com data watchers expect average transaction prices to slide for many luxury models as history shows incentives will begin to trend upward in April and bargaining begins.
Edmunds.com's True Market Value Predicted Price Trends analysis projects some premium models to experience transaction-price declines in April including the Mercedes-Benz E-, S- and CLS-Class; Cadillac's CTS and DTS; the Lexus IS 250 and LS 460 and Audi A3, A6 and A8.
Prices for mainstream models also are likely to get whacked as Toyota Motor Corp. piles on incentives for many of its big-selling models in the attempt to offset the effect of negative perceptions generated by the company's high-profile safety recalls. April may be an exceptionally good time to purchase many of Toyota's traditionally discount-proof models, but the secondary effect of Toyota's brand- and volume-protecting incentive spurt will be a rash of countering incentives by competitors.
That means buyers can expect better deals in April and coming months on some Honda, Ford, Nissan and Chevrolet models that are heavily cross-shopped against the popular and strong-selling models on which Toyota has placed uncommon incentives.
Those models include: Honda Civic, Accord and CR-V; Nissan Altima, Sentra and Rogue; Ford Fusion, Focus and Escape; and Chevrolet Malibu and Cobalt. -- Bill Visnic, Senior Editor
1. Edmunds.com analysts project coming reduced average transaction prices for many luxury models such as the Mercedes-Benz E-Class, despite the fact the all-new ninth-generation version was launched less than a year ago as a 2010 model. (courtesy Mercedes-Benz USA).
2. Toyota has countered its recall-related bad press with a heap of incentives for even its best-selling models (courtesy Toyota Motor Sales, U.S.A., Inc.)