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People Pay More for VWs Than Any Other Brand Sold in the US

24/7 Wall St. logo 24/7 Wall St. 04/12/2019 23:09:50 Paul Ausick
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The average transaction price for November U.S. new car sales rose to more than $38,000, led by VW with an average about $7,000 above the industry's.

Most automakers on Tuesday reported monthly U.S. sales for November. Among those not reporting are the Detroit Three (GM, Ford and Fiat Chrysler) which now report sales quarterly. Among the companies reporting monthly data, Volkswagen reported sales up more than 13% year over year in November and, according to data compiled by analysts at Kelley Blue Book (KBB), VW posted the highest monthly average transaction price of any automaker.

VW's average transaction price last month was $45,208 (KBB does not include consumer incentives). That was about $1,600 more than the estimated Ford average of $43,676 and about $1,700 more than GM's average of $42,547. Fiat Chrysler was the only other automaker to post a price above $40,000, with an average of $40,760. November's industry average was $38,393.

The Detroit Three traditionally make most of their money on sales of pickup trucks, with a solid boost for higher priced sport utility vehicles and crossovers. VW, which does not sell pickups in the United States, achieves its higher transaction price based on sales of its luxury Audi and Porsche nameplates. However, no matter how popular the vehicle, owners still have complaints.

VW sold 56,563 vehicles in the United States last month, and about 36.5% (20,618) of those were Audi sales. Another 6,326 (11%) were Porsche sales. Audi sales rose nearly 21% year over year in November, and Porsche sales rose 11.5%. Sales of the VW nameplate rose 9.1% to 29,218 units.

Sales of the newly redesigned Audi Q3 compact crossover rose 257% month over month to lead VW's surge. According to data from Automotive News, sales of the VW Atlas rose 48% and the VW Tiguan posted a jump of 24%, while Jetta sales dropped 2.6%. Through the first 11 months of the year, VW has sold more crossovers than it sold in a record-setting 2018. More than half of U.S. sales (53%) came from the group's crossover models.

VW's chief sales and marketing officer for North America, Werner Eichhorn, told Automotive News:

"Our SUV lineup has shown consistent strength, helping us outpace the market throughout the year. November's Atlas and Tiguan sales show that we're continuing to meet customer demand as we make up ground in this segment."

Japanese manufacturers Toyota and Honda continue to make headway in the pickup segment with sales up 11% and 18%, respectively, year over year.

Honda's average transaction price in November was the lowest of any carmaker at $29,008, while Toyota's average was $34,692, nearly $4,000 below the industry average.

KBB analyst Tim Fleming commented on November transaction prices:

"Transaction prices rose only 1% as dealer discounts grew to move older inventory. As retail sales slowed by more than 2% this year, vehicles are spending more time on dealer lots, about 80 days on average, which is five days longer than a year ago and the highest level seen since 2017. As a result, there are more discounts and incentives, especially now that the year's end is approaching."

Based on days to turn figures, these are the cars Americans don't want to buy.

The largest year-over-year increase in transaction price was reported in the midsize pickup segment, where the average rose 6.3% to $35,900. The second-largest increase came in the midsize passenger car segment, where the average rose 5.5%. The likely reasons are that automakers can't make the pickups fast enough, on the one hand, and, on the other, a relative scarcity of midsize cars is helping keep prices up.

The average transaction price on electric vehicles dropped by more than 19% in November to $54,626, likely due to a larger share of buyers going for the lower-priced Tesla Model 3 instead of the company's higher-priced Model S and Model X.

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