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Average new-vehicle transaction price hits a whopping new peak in December

Elevated prices for products and higher borrowing rates led to record high transaction prices for new vehicles in December, with the average cost in the U.S. rising to a record $49,507, according to data from Kelley Blue Book released today. The report notes that ATPs — average transaction prices — have climbed above suggested retail prices — MSRPs — for more than a year. Sales volumes were up in December on a year-over-year basis by more than 5%, a situation Kelley attributed to improved supply. Overall sales for 2022, however, were off 8% year over year. “The transaction data from December clearly indicates overall prices showed no signs of coming down as we headed into year-end,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Luxury prices fell slightly in December, but non-luxury transaction prices were up. Truck sales were particularly strong last month, and with many trucks selling for more than $60,000, a new record was all but inevitable.” Industry analysts claim the most obvious headwinds in the new car market are generated by higher interest rates, forced by the Federal Reserve's rate hikes intended to tame inflation, and by generally limited inventory. A recent report from J.D. Power showed that the average monthly payment for a new vehicle loan in December was $718, up $47 from a year ago. But 16% of consumers in December took out loans with monthly payments of over $1,000. Consumers think vehicles, and electric vehicles especially, are way too expensive. Fortunately, manufacturersÂ’ incentives, all but extinct in the past two years, are returning, especially in the electric-vehicle and luxury market, the Kelley data suggest. Plus, "With the new tax credits on the way, electric vehicle ATPs will drop lower for qualifying vehicles,” Rydzewski said. Non-luxury brands, such as Honda and Kia, showed particularly strong performance in December, with the average price paid at $45,578 — a record high and an increase of $994 month over month. Meanwhile, the average luxury buyer paid $66,660 for a new vehicle last month. Mercedes-Benz and Land Rover showed the most price strength in the luxury market, transacting between 2.6% to 6.5% over sticker price. But luxury brands Audi, BMW, Infiniti, Lexus, Lincoln, and Volvo showed the least price strength with some discounting in effect, selling 1% or more below MSRP in December, according to the survey.

Honda expands Takata airbag recall to 5.4M units in the US

While Honda already announced plans to take its front driver's side Takata airbag inflator recall nationwide, the automaker has now officially reported on the number of affected vehicles and the specific models in need of repair. The expanded campaign covers an estimated 5.4 million units across the US, including those already being fixed under the previous regional actions. That number is an expansion of the five million units initially reported by NHTSA. The affected models under the nationwide recall are the 2001-2007 Accord with a four-cylinder engine, 2001-2002 Accord V6, 2001-2005 Civic, 2002-2006 CR-V, 2003-2011 Element, 2002-2004 Odyssey, 2003-2007 Pilot, 2006 Ridegline, 2003-2006 Acura MDX, 2002-2003 TL and 2002 CL. For customers who expressed concern about their vehicle's safety, Honda had already been replacing the inflators nationwide. It's possible for the inflators in these vehicles to rupture when inflating the airbag, spraying metal fragments at occupants. This problem has been blamed for at least five deaths worldwide and at least 139 reported injuries. In its statement, Honda said that it worked with Takata to test the recalled inflators in the original high-humidity recall regions, and there were no abnormal deployments in these evaluations. Honda will begin notifying owners by "over time," according to its statement. Priority will be put on the geographic areas with the highest risk of ruptures. Those in the original recall region were contacted in September. Earlier in December, Honda partnered with Autoliv to supply the automaker with replacement inflators for this campaign. Autoliv predicted it would take six months for deliveries to start. Takata also increased its production of substitute components. Scroll down to read the company's announcement of this nationwide expansion. Statement by American Honda Regarding National Safety Improvement Campaign: Driver's Front Airbag Inflator Supplied by Takata Dec 8, 2014 - TORRANCE, Calif. Honda will voluntarily expand a regional Safety Improvement Campaign initiated in June 2014 (NHTSA No. 14V-351) into a national Safety Improvement Campaign affecting certain 2001 through 2011 Honda and Acura vehicles in the United States to replace the driver frontal airbag inflator, free of charge. Honda is expanding this Safety Improvement Campaign to address concerns raised by its customers whose vehicles were not included in the regional campaign.

Toyota raises Japanese base wages for first time since 2008

Toyota is on track for record profits, and in return, its Japanese workers are receiving their first increase in base wages since 2008, plus higher pay based on seniority and a larger bonus for 2014. The Japanese automaker predicts the average laborer will net a 2.9 percent income gain.
The average Toyota employee will earn 2,700 yen ($26.28) more each month, a 0.8 percent increase from last year. Workers will also receive about 7,300 yen ($71.09) more monthly based on seniority and promotions. Finally, the company's union pushed through a median bonus of 2.44 million yen ($23,768) for 2014, the highest in 6 years.
The pay boost comes as Toyota forecasts a record 1.9-trillion yen ($18.5 billion) profit for the fiscal year ending on March 31, according to Bloomberg. It has been helped by the Japanese government's efforts to weaken the yen on international markets and expand inflation. Prime Minister Shinzo Abe has been asking businesses to increase compensation to end years of deflation and offset upcoming higher sales taxes. Honda and Nissan have also raised their wages there in recent months.