Automakers Achieve Record $38 Billion Revenue in January Despite Slower Showroom Traffic

SANTA MONICA, Calif.

TrueCar, Inc. (NASDAQ: TRUE) projects U.S. revenue from new vehicle sales reached a record high for the month of January of $38 billion, up 1.4 percent from a year ago. January marked the auto industry’s 25^th consecutive month of year over year revenue expansion.

Higher average transaction prices helped automakers post a $520 million gain in revenue versus January 2015, despite a likely increase in incentive spending and somewhat lower sales compared with a year ago. As previously announced, TrueCar projects sales of new cars and light trucks contracted 0.3 percent last month.

“A number of automakers, notably General Motors and Nissan, hit the ground running in 2016, with revenue gains over last January,” said Eric Lyman, TrueCar’s vice president of industry insights. “We expect higher-margin utilities to stay in high demand with consumers, fueling record industry revenue this year of over $610 billion.”

TrueCar estimates the average transaction price (ATP) for a new light vehicle was $33,155 in January, up 1.7 percent from a year ago. Average incentive spending per unit rose by $346 to $2,932. The ratio of incentive spending to ATP was 8.8 percent, up from 7.9 percent a year ago.

“We continue to see a trajectory in new vehicle transaction prices,” said Stacey Doyle, TrueCar’s senior industry analyst. “Non-premium utility vehicles will help spur the growth this year, with a 4.3 percent increase, bringing full-year industry ATP to the $34,000-level for the first time.”

Following non-premium utilities, TrueCar projects average transaction prices for premium vehicles will increase by 3.1 percent and non-premium pickup trucks will rise by 2.4 percent. Non-premium cars will likely receive heavy incentive support from automakers as they continue to lose ground with consumers to other vehicle segments. ATPs for non-premium subcompact, compact, mid-size and large cars may rise just 0.6 percent compared to last year.

Average Transaction Price (ATP)

TrueCar estimates the average incentive for light vehicles in January will increase $346, or 1.7 percent, from a year ago, and decreasing $130, or 2.5 percent, from December 2015.

Incentive per Unit Spending

This month’s ratio of incentive to ATP for light vehicles was 8.8 percent, up 11.5 percent from January 2015 and down 1.8 percent from December 2015, based on TrueCar analysis. Subaru, Daimler and Kia show the most improvement in ATP ratio in January versus the year-earlier month.

Incentive Spending as a Percentage of ATP

Total Net Revenue

About TrueCar

TrueCar, Inc. (NASDAQ: TRUE) gives consumers transparent insight into what others paid and access to guaranteed savings off MSRP from TrueCar Certified Dealers. TrueCar’s network of more than 10,000 trusted Certified Dealers is committed to providing upfront pricing information and a hassle-free buying experience. TrueCar powers car-buying programs for some of the largest U.S. membership and service organizations, including AARP, American Express, AAA, Sam’s Club and USAA. Not all program features are available in all states. TrueCar is headquartered in Santa Monica, California, with offices in San Francisco and Austin, Texas. For more information about TrueCar and industry analysis please visit www.truecar.com and insights.true.com. Follow us on Facebook or Twitter.

TrueCar media line: +1-844-469-8442 (US toll-free) | Email: pressinquiries@truecar.com

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TrueCar, Inc.
pressinquiries@truecar.com
Veronica Cardenas
424-258-2487
VCardenas@truecar.com