Automotive industry researcher Edmunds.com reported that its price index for new vehicles decreased 0.8% from 99.4 in May to 98.6 in June.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Similar in purpose to the consumer price index, the Edmunds price index measures the average changes in retail prices for new vehicles with fixed options over time in order to analyse trends.
Edmunds believes that the decrease was primarily the result of the petrol price hike, which inhibited demand for the large truck, minivan, and large SUV segments; their indices fell 3.0%, 2.1% and 1.5% respectively. Compact SUVs experienced the largest increase, 1.1%, followed by luxury sport cars at 1.0%.
“Larger vehicles lost sales momentum when consumers saw gas prices climb, and the interest rate hike seems to be having a psychological effect of its own,” said Jane Liu, vice president of data analysis for Edmunds.com.
“Consumers are responding to high-profile financial trends when making car shopping decisions despite the fact that both these events have minimal financial implication for most people. However, if interest rates continue to rise, subvented APRs and leases will become much more expensive for automakers. In that event, it will become even more important that they optimise the cost-effectiveness of their incentives programmes.”
Edmunds.com predicts that in the coming months there will be a gradual increase in industry average days-to-turn, which measures how many days on average it takes to sell vehicles after they arrive at dealerships. In June, the average was 69 days, compared to 64 in May 2004 and 69 in June 2003. Of all brands, Oldsmobile had the longest days-to-turn at 144, followed by Isuzu at 110. The quickest inventory turnaround was for Scion at 16 days, followed by Mini at 23 days.
In June 2004, the sales-weighted average new vehicle sticker price was $US29,220, $35 lower than in May 2004 but $634 higher than in June 2003. The sales-weighted average net price was $24,501 – 16.2% below MSRP, the greatest difference since August 2003. Large SUVs currently have the largest discount of any category at 21.8%, while luxury sport cars have the smallest at 6.6%.
