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).