TrueCar.com: Domestics Keep Incentive Push Going into June
SANTA MONICA, Calif. — Analysts from TrueCar.com believe the generous discounts and customer incentives automakers handed out in May are spilling over into June.
According to the site's TrueTrends Report for June, domestic manufacturers are leading this charge. Brand discounts for nameplates such as Chevrolet, Ford, GMC, Chrysler and Lincoln are regularly topping 10 percent.
When looking at some specific 2010 models with the greatest markdown from MSRP, the site's assessment about domestic OEM behavior is reinforced. For example, the site projects a 21-percent discount for the Chevrolet Silverado 1500, a 19-percent reduction for the Jeep Grand Cherokee and a 15-percent cut on the Ford Focus.
However, units from the Big 3 aren't the only vehicles predicted to have heavy MSRP discounts in June. TrueCar.com expects an 18-percent reduction for the Hyundai Sonata, a 13-percent cut on the Kia Sedona and an 11-percent discount for the Hyundai Elantra Touring.
In terms of the largest overall incentive packages, TrueCar.com contends the top three for June all are connected with luxury models. The site noted the BMW M6 is being offered with $12,500 in dealer cash available at time of purchase. Meanwhile, it also spotted a $6,000 package for the Infiniti QX56 and a $5,000 incentive on the Volvo XC70.
All told, the site projects June 30 will be the day for the industry's high-water mark of consumer incentives. TrueCar.com thinks that day will involve a 9.05-percent discount off of MSRP.
Analysts also contend the trend could run over through July 4 with discounts still expected to be above 7.5 percent off of MSRP as dealers push holiday weekend sales events.
Turning to a look at days in inventory, TrueCar.com noticed that SUVs are moving quickly. These units have an average inventory stay of 34 days. The average is a little more than 60 days for segments such as convertibles (65 days) as well as wagons and coupes (62 days).
Two specific models represented the extremes when considering time on the lot. TrueCar.com considers the Sonata to be "a potential steal" since it's remained in inventory at an average of 166 days. Conversely, the GMC Terrain has been in inventory an average of less than two weeks — 13 days to be exact.
TrueCar.com analysts highlighted which vehicles have the best Price Flex Score, a composite reading of total incentives, greatest percentage below MSRP, greatest price drops and days in inventory. They reiterated that the score measures how elastic the transaction price is for a particular model. A high Flex Score means a possibility of a great swing (high or low) in the price from MSRP.
Posting a score of 100 was the Honda Insight, followed by the Hyundai Elantra Touring and Mitsubishi Eclipse at 99. The Jeep Liberty wasn't far behind at 97.
The TrueTrends Report for June also offered some analysis of how sales of 2011 models are performing. The report indicated BMW is capturing 47.7 percent of its monthly sales through 2011 models since the 3, 5 and 7 Series, M3, X5, X6 and Z4 are all available.
Two automakers represented brands with 2011 models having the longest stay in inventory. The Toyota Camry (40 days) and Toyota Camry Hybrid (39 days) followed by the Volvo C70 (38 days and Volvo C30 (36 days).
Jesse Toprak, vice president of industry, trends and insights for TrueCar.com, wrapped up the report by offering his overall assessment of incentives and sales projections.
"Crossovers are the hot commodity as the summer car buying season kicks into gear, with high consumer demand and relatively low inventory," Toprak noted.
"Buyers can still find some great deals, particularly if they're in the market for a large truck or a sedan," he added.