JD Power: Higher Transaction Prices Seen

J.D. Power and Associates - December 31, 2012

As 2012 wraps up, pos­si­bly the most impor­tant trend for the U.S. auto indus­try is that new-vehi­cle sales con­tin­ue their recov­ery, says Tyson Jominy of J.D. Pow­er and Asso­ciates.

Find out more about what the experts see for 2013.

[Assum­ing a solu­tion to the fis­cal cliff] Growth is expect­ed to con­tin­ue into 2013—our retail sales fore­cast for next year is 12.25 mil­lion units.

While indus­try sales vol­umes are increas­ing, they are still well below the lev­els record­ed in 2004–2007, when annu­al retail sales were in the 13–14 mil­lion-unit range. The pri­ma­ry rea­son that the indus­try has not rebound­ed to these record sales lev­els is a change in focus among OEMs. Automak­ers now empha­size strong trans­ac­tion prices in addi­tion to sales vol­umes.

The aver­age price of used cars retailed by deal­ers has risen from an aver­age of approx­i­mate­ly $18,100 per vehi­cle in 2011, to around $18,300 at the end of 2012. Like last year, this increase occurred despite the fact that the vehi­cles being sold are old­er and have high­er mileage (a func­tion of the reduced sup­ply of recent mod­el-year used vehi­cles).

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