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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.

Audi A3 supplies tight, model stealing Honda, Toyota sales

It appears that there was a pent up demand for compact, front-wheel drive German luxury sedans that no one really knew about. Not only has the Mercedes CLA-Class been a success in the US with its Hungarian factory running three shifts to keep up, but the Audi A3 Sedan is doing quite well, too, after just three full months on the market.
Audi of America recently announced that the compact sedan shifted 2,452 vehicles in June and 7,735 units of the A3 since the beginning of the year. Not only are they selling; it's the people buying them that's important. According to Audi USA spokesperson John Schilling speaking to Autoblog, "A little over 25 percent of A3 buyers in April were 30 years or under." That's compared to about 18 percent for the A4, he said. Company executives also recently told Edmunds that many of those new customers are brand conquests turning in Honda or Toyota models. We gently mocked Audi when it held A3 Sedan launch parties aimed at hipsters that served craft beer and played indie music, but the marketing worked, apparently.
That said, if you're in the market for an A3, you might have not be able to get one immediately. According to Edmunds, some customers are on a waiting list for the compact luxury sedan. Although, Schilling said that's because Audi is still stocking dealers. "It's a little leaner than other models, but that's mainly because it's new and still ramping up," he said.

VW Group exploring F1 options, would likely wait until Ecclestone is out

The real hurdle is that Volkswagen overlord Ferdinand Piech doesn't like Bernie Ecclestone on a personal or professional level. Superbugs. They are antiobiotic-resistant bacteria and viruses, fiends that defy eradication no matter how much counteracting agent you throw at them. Reports that Audi is going to join Formula One? They are the superbugs of rumors; for five years they've been coursing through the blood of motorsport, and no amount of denials or Audi's continued non-presence in F1 has been able to make them go away. Not even a month ago we contracted another bout of it, courtesy of Auto Express, citing sources who said Audi would leave endurance racing and DTM - handing Le Mans over to Porsche, instead of the other way around - and buy either Red Bull or Toro Rosso for an entry in 2016 with an in-house powerplant. Within 24 hours of that story, Audi Sport sent the tweet, "Audi in F1? There rumors keep appearing with regularity since years. It's pure speculation again this time and without any foundation." Now, few things are impossible in F1, but lining up on the grid in 2016 is not far away from needing to be ready tomorrow, in F1 terms, which is why these announcements come long in advance. Honda, you'll recall, gave us almost two years' notice of its F1 reunion and Porsche gave us three years notice about Le Mans. A brand-new report in the BBC says that Audi is using new hire and ex-Ferrari technical director Stefano Domenicali to lead a feasibility study into an F1 program. According to that story, the real hurdle to the foray, however, is that Volkswagen Group overlord Ferdinand Piech doesn't like F1 boss Bernie Ecclestone on a personal or professional level, so one of them would need to leave his position before Audi could say yes, feasibility be damned. Since we're talking about two men who define professional longevity, that day might not come soon. The BBC story goes on to say that Martin Winterkorn, head of the VW Group management board, would like to see the group in F1, and that if it happened it would be with a "car designed and made in Germany." Ladies and gentlemen, you know where to file this one...