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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.

2023 J.D. Power APEAL Study shows new-car customer satisfaction scores slip

J.D. Power survey results have been slightly up but mostly down for automakers this year, literally. In February, the 2023 Vehicle Dependability Study showed an overall decline compared the 2022 a month before the Customer Service Index Study did the same. The trend reversed in June with a better overall score on the 2023 U.S. Electric Vehicle Consideration Study than in 2022, then declined again the same month on with a lower overall score on the 2023 Initial Quality Study. The declines continue with the 2023 J.D. Power U.S. Automotive Performance, Execution and Layout (APEAL) Study, overall satisfaction among the 84,555 respondents down two points overall compared to 2022, to 845 out of 1,000 points. Because last year's score dropped compared to 2021, this year marks the first consecutive decline in the study's 28-year history. The study tries to "[measure] owners' emotional attachment and level of excitement with new vehicle" after 90 days of ownership by asking new owners to rate 37 attributes in 10 areas around the vehicle, such as the feeling they get when they hit the accelerator. Satisfaction with nine of the attributes is down this year versus last, fuel economy the only segment to show better results with 15 points more satisfaction. Styling and infotainment are big drags on satisfaction. Responses to new car exterior looks tallied 888 points, down from 894 last year, the largest drop in this year's study. On the digital side, less than half of those surveyed this year said they prefer using a manufacturer's built-in infotainment. From 70% of respondents in 2020 preferring to use a manufacturer's in-house software to play audio instead of Android Auto or Apple CarPlay, that's 56% in 2023. Going all-in on Google appears to have the best effect. J.D. Power said that vehicles with both Google's Android Automotive Operating System (AAOS) and Google Automotive Services (GAS) "score higher in the infotainment category than those with no AAOS whatsoever. AAOS without GAS receives the lowest scores for infotainment of the three categories."  Frank Hanley, senior director of auto benchmarking at J.D. Power, said, "Despite the technology and design innovations that manufacturers put into new vehicles, owners are lukewarm about them. While innovations like charging pads, vehicle apps and advanced audio features should enhance an owner’s experience, this is not the case when problems are experienced.

Jaguar wants to become the British electric company

Jaguar has been telegraphing its electric future for years, and this week we're beginning to see it come to fruition. The company's Formula E race team officially launched September 8 with sponsorship, livery, and an interesting name for its racecar, the I-Type 1. It marks Jaguar's return to factory-supported racing and serves as a model for the company's future strategy. "The Formula E championship will enable us to engineer and test our advanced technologies under extreme performance conditions," Nick Rogers, executive director of product engineering at Jaguar Land Rover, said in a statement. "We will apply this vital knowledge as part of our real-world development." Formula E competition starts October 9 as the all-electric racing series begins its third season. Panasonic signed on as the title sponsor of the team. Formula E is a natural move for Jag and allows the British company to remain true to its racing heritage while still looking toward. The company claims seven Le Mans titles, which is the fourth-most in history, even though it hasn't won one since 1990. That's a great lineage, but Jaguar knows it's getting dusty. Launching a Formula E effort allows it to compete in a form of motorsports that should prove relevant to road-car technology. Jag is drawing on Williams Advanced Engineering (you might have heard of its F1 team) for the electric powertrain. Williams also helped with the development of Jaguar's C-X75 plug-in concept car. Meanwhile, we also captured an F-Pace crossover silently testing this week in the Alps. Though it looks like a normal F-Pace, spy shooters report it was producing no engine noise, leading (or perhaps leaping) to the conclusion it's the rumored electric SUV Jaguar is working on. Likely, this prototype has a diesel engine as a range extender. View 11 Photos Though the camouflaged F-Pace is great fodder for speculation, Jag's electric efforts are not a secret. Jaguar and Land Rover showed off three electric-vehicle demonstrators last year and the company is exploring everything from mild hybrids to full electric powertrains. JLR has filed paperwork to secure trademarks for I-Pace and E-Pace. "JLR is definitely rushing headfirst into electrification," said Ed Kim, vice president of industry analysis for research firm AutoPacific.