Category: AutomotiveUnited States

Total New-Vehicle Sales Increase as Availability Improves; Consumer Spending on New Vehicles Sets February Record

2023-02-23

jillian.breska

The Total Sales Forecast

Total new-vehicle sales for February 2023, including retail and non-retail transactions, are projected to reach 1,117,100 units, a 7.2% increase from February 2022 according to a joint forecast from JD Power and LMC Automotive. February 2023 has the same number of selling days as February 2022.

The Retail Sales Forecast

New-vehicle retail sales for February 2023 are expected to increase when compared with February 2022. Retail sales of new vehicles this month are expected to reach 907,900 units, a 0.1% increase from February 2022.

Thomas King, president of the data and analytics division at JD Power:
“Despite economic headwinds, the auto industry is on track to deliver year-over-year sales growth alongside record transaction prices and record consumer expenditures for the month of February. Improving vehicle availability is allowing more retail and fleet customers who have been waiting on the sidelines to finally buy a new vehicle.

“The February total sales growth is due primarily to increased sales to fleet customers—up 54%—as manufacturers increase production and make more vehicles available to this segment of the industry. Availability for retail customers is improving but remains extremely low, which is keeping prices and dealer profitability well above historic levels.”

New-vehicle transaction prices continue to rise, with the average price reaching a February record of $46,229, a 4.8% increase from a year ago.

The record transaction prices means that consumers are on track to spend nearly $42.0 billion on new vehicles this month—the most ever for the month of February and an increase of 5.0% from February 2022.

“As expected with improved supply, dealer profits are taking a step back but remain well above pre-pandemic levels. Total retailer profit per unit—inclusive of grosses and finance and insurance income—is on pace to be $3,820. This is down 23.3% from a year ago but still more than double 2019. The decline is due primarily to fewer vehicles being sold above MSRP. In February, 31% of new vehicles are being sold above MSRP, down from the high of 48% in July 2022.”

Total aggregate retailer profit from new-vehicle sales for the month of February is projected to be down 23.2% from February 2022, reaching $3.5 billion for the second-highest February on record.

“Dealerships are still pre-selling a large portion of their inventory allocation, but increased supply means more buyers are purchasing vehicles that are in inventory at a dealership. This month, 43% of vehicles will be sold within 10 days of arriving at a dealership, down from a high of 57% in March 2022. The average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 29 days—up from 19 days a year ago—but still less than half the pre-pandemic average of 70 days.

“Manufacturer discounts are up slightly from a month ago, but they remain historically low. The average incentive spend per vehicle is tracking toward $1,335, a 4.7% increase from a year ago. Incentive spending per vehicle expressed as a percentage of the average vehicle MSRP is trending at 2.8%, down 0.1 percentage points from February 2022. One of the factors contributing to the low level of spending is the absence of discounts on vehicles that are leased. This month, leasing is accounting for just 18% of retail sales. In February 2019, leases accounted for 31% of all new-vehicle retail sales.

“Elevated pricing coupled with repeated interest rate increases continue to inflate monthly loan payments. After breaking the $700 level for the first time ever in July 2022, the average monthly finance payment in February is on pace to be $722, up $59 from February 2022. That translates to an 8.9% increase in monthly payments from a year ago. The average interest rate for new-vehicle loans is expected to be 6.8%, an increase of 252 basis points from a year ago.

“Used-vehicle prices are falling which is resulting in less trade-in equity for new-vehicle buyers who have a vehicle to trade. The average trade-in equity for February is trending toward $8,955, down $333 from a year ago and down $1,095 since the peak in June 2022. For context, February 2023 trade equity is still more than double the pre-pandemic level, helping owners that have a vehicle to trade in offset some of the pricing and interest rate increases.

“Even with the positive gains in February, the industry is still not reaching its sales volume potential. While supply is consistently increasing, the inventory levels are still not sufficient to fulfill demand each month. This means industry profitability will remain well above historical levels throughout 2023 but will deteriorate during the course of the year.”

Sales & SAAR Comparison

U.S. New Vehicle	February 20231, 2	January 2023	February 2022
Retail Sales	907,885 units (0.1% higher than February 2022)2	855,027 units	906,649 units
Total Sales	1,117,088 units (7.2% higher February 2022)2	1,051,254 units	1,042,281 units
Retail SAAR	12.2 million units	13.6 million units	12.2 million units
Total SAAR	14.6 million units	16.0 million units	13.7 million units

¹ Figures cited for February 2023 are forecasted based on the first 16 selling days of the month.
² February 2023 has 24 selling days, the same as February 2022.

The Details

• The average new-vehicle retail transaction price in February is expected to reach $46,229, a 4.8% increase from February 2022. The previous high for any month—$47,362—was set in December 2022.
• Average incentive spending per unit in February is expected to reach $1,335, up from $1,275 in February 2022. Spending as a percentage of the average MSRP is expected to fall to 2.8%, down 0.1 percentage points from February 2022.
• Average incentive spending per unit on trucks/SUVs in February is expected to be $1,339, up $73 from a year ago, while the average spending on cars is expected to be $1,320, up $9 from a year ago.
• Retail buyers are on pace to spend $42.0 billion on new vehicles, up $2.0 billion from February 2022.
• Truck/SUVs are on pace to account for 79.2% of new-vehicle retail sales in February.
• Fleet sales are expected to total 209,200 units in February, up 54.2% from February 2022 on a selling day adjusted basis. Fleet volume is expected to account for 19% of total light-vehicle sales, up from 13% a year ago.
• Average interest rates for new-vehicle loans are expected to increase to 6.78%, 252 basis points higher than a year ago.

EV Outlook

Elizabeth Krear, vice president, electric vehicle practice at JD Power:
“The U.S. electric vehicle infrastructure and charging network will be put to the test in 2023. Retail share of battery electric vehicles (BEVs) in the United States is on track to end February at a record 8.5%, an increase of 74% from February 2022. Including plug-in hybrids (PHEVs), share for electric vehicles will exceed 10% for the first time. This surge in demand for vehicles follows consumers having higher satisfaction with Level 2 charging in Q4 2022, but the industry must address declining satisfaction with DCFC fast charging or risk getting out over their skis with EV owners.

“Satisfaction with the condition of L2 chargers and cost of charging improved, driven by upgrades made by network operators. A good portion of the decline of L2 charging earlier in the year was attributed to the cost of charging, but now in comparison to high DCFC charging costs, L2 charging looks like a bargain. In contrast, DCFC customer satisfaction declined 14 points in Q4 2022, driven by cost, availability and speed. Customers are not experiencing the full charging rate at all DCFC chargers, either due to vehicle limitations or demand control by charging network or utility provider.

“Having lost ground, Tesla has emerged as the most-considered EV brand among shoppers, with 44% either ‘very likely’ or ‘somewhat likely’ to consider the brand for their next EV purchase.

“Availability of EVs is improving. According to the JD Power EV Index, overall EV availability has increased 5 index points, driven largely by an increase of lower-priced, lower trim-level versions of popular models, such as the Ford F-150 Lightning.”

Global Sales Outlook

Jeff Schuster, group head and executive vice president, automotive at GlobalData, parent of LMC Automotive:
“January’s global light-vehicle sales were down 8.0% year over year and the selling rate stood at 83 million units, broadly in line with Q4 2022 but slightly weaker than expected. Global supply constraints and inflation remain key issues, though distortions from tax changes also held back the global total last month. China’s market got off to a sluggish start in 2023 with sales down 34% year over year, largely due to the spike in COVID-19 infections and the termination of the tax incentives. Both North America (up 7%) and Western Europe (up 10%) had positive year-over-year growth in January, but this should not be overemphasized since 2022 was a weak base of comparison. As war lingers on in Ukraine, Eastern Europe is down 9% from January 2022.

“Global light-vehicle sales in February are forecast to be positive, with volume forecast to increase 7%. However, the selling rate is expected to retreat to below 80 million units, just 200,000 units above February 2022.  Eastern Europe remains the drag on global volume with an expected decline of 22% from a year ago.

“The forecast for 2023 is holding at a 6% increase, with global light-vehicle sales rounding up to 85.9 million units. While the outlook still bears a high level of uncertainty, disruption is easing some and other risks also appear to be more balanced. Markets are resilient and economies around the world are holding up fairly well, which should keep the automotive recovery on track.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.com

 

Owner Satisfaction Gets a Jolt from New Models as Electric Vehicle Market Grows, JD Power Finds

2023-02-28

jillian.breska

TROY, Mich.: 28 Feb. 2023 — As more battery electric vehicle (BEV) models become available for purchase, owners’ satisfaction with their overall experience is shifting to more traditional factors such as quality and styling. According to the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Ownership Study,^SM released today, the shift is most evident in the respective premium and mass market segment award recipients, Rivian R1T and MINI Cooper Electric.

In its first year of eligibility, the Rivian R1T ranks highest overall with a satisfaction score of 794 (on a 1,000-point scale). Owners have high levels of satisfaction with the driving enjoyment and interior/exterior styling factors. MINI Cooper Electric ranks highest in the mass market segment with a score of 782, supported by the highest satisfaction score of any EV model in the study’s highest-weighted index factor, quality and reliability.

“The electric vehicle landscape is changing quickly, and newer models are bringing in more mainstream, first-time EV buyers,” said Brent Gruber, executive director of the EV practice at JD Power. “Recent vehicle launches from both new brands and traditional automakers have had a profound effect on what factors are most important in the ownership experience. Today’s EV owners are looking for quality, reliability, driving enjoyment, safety and technology features.”

Following are key findings of the 2023 study:

• Differences notable between premium and mass market segments: For a third consecutive year, owners of mass market BEVs cite infotainment as the most problematic category (19.2 problems experienced per 100 vehicles, or PP100). Among premium BEV owners, the most problematic categories are squeaks and rattles (17.5 PP100) and exterior (13.6 PP100). The largest gap in satisfaction between owners of premium and mass market BEVs is availability of public charging, which is greatly influenced by the Tesla network of chargers. Among premium BEV owners, satisfaction with public charging availability is 589, while satisfaction among mass market BEV owners is 341. “The EV marketplace is dynamic and the important factors that manufacturers need to watch will vary based on their history and experience,” Gruber said. “First-time EV buyers who are more mainstream will compare their EV’s build quality to what they know about gas-powered vehicles.”
• Towing more satisfying for EV truck owners: New to the study this year are survey questions specific to EV trucks regarding towing. Interestingly, satisfaction is higher among EV truck owners who have used their vehicle for towing (779) than among owners who have not towed (753). Satisfaction with driving range is higher among owners who have towed (635) than among those who have not towed (617), and satisfaction with accuracy of stated range also is higher (707 vs. 680, respectively). Truck manufacturers that proactively communicate the effect that towing has on range—like they do with gas mileage—seems to help set owner expectations.
• Changing landscape of first-time BEV owners: The study shows an increase of 11 percentage points from 2022 in the rate of first-time BEV ownership, rising to 85% from 74%. However, with a host of new product offerings, the mass market BEV segment is attracting new owners at a more rapid rate, as the percentage of first-time BEV owners in the segment jumped to 89% from 67% in 2022. While more vehicle shoppers are being drawn to EV ownership, satisfaction among first-time BEV owners is higher than among veteran BEV owners in only one category: vehicle quality and reliability (756 vs. 749, respectively). In the mass market segment, 68% of first-time BEV owners say that expected lower running costs and tax credits/incentives were the primary reasons for purchase, while driving performance is the most frequently cited purchase reason (75%) among first-time premium BEV owners.

Study Rankings

Rivian R1T ranks highest overall and highest in the premium BEV segment with a score of 794. Tesla Model 3 (759) ranks second.

MINI Cooper Electric ranks highest in the mass market BEV segment with a score of 782. Kia EV6 (762) ranks second and Ford Mustang Mach-E (742) ranks third.

The number of award-eligible models in the premium segment has grown from four to five year over year, while award-eligible mass market models have nearly doubled (from six to 10). Satisfaction among owners of premium EVs averages 756, while satisfaction among mass market EV owners averages 730.

The U.S. Electric Vehicle Experience (EVX) Ownership Study, now in its third year, implements a methodology change for 2023 by narrowing the satisfaction index to focus on the first year of ownership. The overall EVX ownership index score measures electric vehicle owner satisfaction in both premium and mass market segments. The 2023 study includes 10 factors (in alphabetical order): accuracy of stated battery range; availability of public charging stations; battery range; cost of ownership; driving enjoyment; ease of charging at home; interior and exterior styling; safety and technology features; service experience; and vehicle quality and reliability.

The study is conducted in collaboration with PlugShare, the leading EV driver app maker and research firm. This study sets the standard for benchmarking satisfaction with the critical attributes that affect the total or overall EV ownership experience for both BEV and PHEV vehicles. Survey respondents for the study include 7,073 owners of 2022 and 2023 model-year BEVs and PHEVs. The study was fielded in from August through December 2022.

For more information about the U.S. Electric Vehicle Experience (EVX) Ownership Study, visit https://www.jdpower.com/business/automotive/electric-vehicle-experience-evx-ownership-study.

About PlugShare
Based in El Segundo, Calif., PlugShare maintains the most comprehensive census of EV infrastructure in the world. They make the PlugShare app for iOS, Android and the Web, the most popular EV driver app globally, in use by most drivers in North America and over one million EV drivers worldwide. PlugShare also provides sophisticated data tools, reports, custom consulting and comprehensive research on EVs for automakers, utilities, charging networks, government and the rest of the EV industry. It operates the world’s largest EV driver survey research panel, PlugInsights, now with over 63,000 members.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info

 

EV Service Jolts JD Power CSI Study Results, Resulting in First Satisfaction Decline in Nearly 30 Years

2023-03-07

jillian.breska

TROY, Mich.: 9 March 2023 — The increasing volume of battery electric vehicles (BEVs) being serviced at dealerships is contributing to a negative effect on overall customer service satisfaction, resulting in a year-over-year decline in score for the first time in 28 years. According to the JD Power 2023 U.S. Customer Service Index (CSI) Study,^SM released today, satisfaction with the service experience declines 2 points to 846 (on a 1,000-point scale) in this year’s study.

Customer service satisfaction among owners of BEVs is 42 points lower than among owners of internal combustion engine (ICE) vehicles. A leading factor is that recall rates are more than double for BEVs than their gas/diesel counterparts. Additionally, service advisor knowledge continues to be a major satisfaction issue among BEV owners who provide a rating of 8.01 (on a 10-point scale) compared with 8.59 among owners of ICE vehicles.

“As the electric vehicle segment grows, service is going to be a ‘make or break’ part of the ownership experience,” said Chris Sutton, vice president of automotive retail at JD Power. “The industry has been hyper-focused on launches and now these customers are bringing their electric vehicles in for maintenance and repairs. As training programs for service advisors and technicians evolve, EV service quality and customer experience must address both the vehicle and the unique customer needs. The EV segment has the potential to spur massive convenience improvements in how customers service their vehicles—but we’re not seeing the benefits yet.”

The study, now in its 43^rd year, includes emerging features such as valet service, mobile vehicle servicing and online/smartphone app payment options to gauge the effect these processes have on the service experience. The study measures satisfaction with service at franchised dealer or aftermarket service facilities for maintenance or repair work among owners and lessees of one- to three-year-old vehicles. It also provides a numerical index ranking of the highest-performing automotive brands sold in the United States, which is based on the combined scores of five measures that comprise the vehicle owner service experience. These measures are (in order of importance): service quality (32%); service advisor (19%); vehicle pick-up (19%); service facility (15%); and service initiation (15%).

Following are key findings of the 2023 study:

• Vehicle recalls drive satisfaction declines: Satisfaction declines 23 points when an owner must bring their vehicle in for a recall repair rather than for traditional maintenance or repair. Recall repair visits also have a negative effect on Net Promoter Score® (NPS)¹ ratings, a vital metric for owners who share positive recommendations about a business. This is most evident with premium brands as the servicing dealership NPS declines 13 points when customers experience a recall.
• Service departments getting the (text) message: In the 2019 CSI Study, 34% of owners expressed the desire to receive updates through simple text messages rather than phone calls, but only 9% actually did receive texts from dealerships. Now, dealerships have gotten the figurative message, and, as measured in the 2023 study, are now sending simple text messages 21% of the time to update customers vs. making a phone call (17%). The go-to communication method for service departments is now text messaging, as more than half (54%) of Generation X,²Y and Z customers say they prefer it.
• Owners wait even longer for an appointment: Since the 2021 study, the number of days that owners wait for an appointment has increased 1.9 days for premium vehicles and 1.3 days for mass market vehicles. Appointment wait times are now 5.6 days for premium vehicles and 4.8 days for mass market vehicles. Labor, loaner vehicle availability and parts shortages continue to be the catalyst for the increasing amount of time it takes to get a vehicle serviced.
• Owners’ service preferences differ: Owners provide higher trust ratings for franchise dealerships than for aftermarket service facilities for complex repairs (6.14 on a 7-point scale) vs. 5.75 for aftermarket full-service maintenance and repair facilities. When ease of doing business is the primary driver, trust preference swings to aftermarket facilities for maintenance (6.18 vs. 6.11 for dealerships). These findings are based on a battery of similar questions asked both in the CSI Study and in the JD Power Aftermarket Service Index (ASI) Study. ^SM  
• Climbing the chart: The top three brands with the greatest improvement in year-over-year satisfaction rankings are Alfa Romeo (+59 points), Mitsubishi (+30) and Infiniti (+16).

Highest-Ranking Brands and Segments

Lexus ranks highest in satisfaction with dealer service among all brands for a second consecutive year, with a score of 900. Porsche (880) ranks second in the premium segment, followed by Cadillac (879) and Infiniti (878).

Mitsubishi ranks highest in satisfaction with dealer service among mass market brands for the first time, with a score of 884. Mazda (870) ranks second and Buick (867) ranks third.

For the first time in the study’s history, model segment rankings are now available to provide even more granularity. “A truck is not a car, and the vehicle needs are going to be different,” Sutton said. “Each vehicle segment has a unique service experience based on customer preferences, demographics and vehicle use, wear and tear, so it’s appropriate to recognize the different journeys that car, SUV and truck customers have in the service experience.”

Among premium cars, Lexus ranks highest (902), followed by Porsche (880) and Infiniti (878).

Among premium SUVs, Lexus (900) ranks highest. Cadillac and Porsche rank second in a tie, each with a score of 880.

Nissan (886) ranks highest in satisfaction among truck brands with a score of 886. Chevrolet (851) ranks second and GMC (843) ranks third.

In the mass market car segment, Subaru ranks highest (866). Mazda (863) ranks second and Honda (855) ranks third.

Mitsubishi ranks highest among mass market SUVs/minivans with a score of 884. Mazda (872) ranks second and Buick (867) ranks third.

The 2023 U.S. Customer Service Index (CSI) Study is based on responses from 64,248 verified registered owners and lessees of 2020 to 2022 model-year vehicles. JD Power goes to great lengths to ensure that survey respondents are true owners of the brand they are representing. The study was fielded from August through December 2022.

For more information about the U.S. Customer Service Index (CSI) Study, visit https://www.jdpower.com/business/automotive/us-customer-service-index-csi-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info

¹Net Promoter,® Net Promoter System,® Net Promoter Score,® NPS,® and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

²JD Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.

 

With Boost from Electric Vehicle Tires, OE Tire Satisfaction Increases, JD Power Finds

2023-03-15

jillian.breska

TROY, Mich.: 16 March 2023 — Overall satisfaction with original equipment tires increases to 799 (on a 1,000-point scale) in 2023, up 5 points from 2022, according to the JD Power 2023 U.S. Original Equipment Tire Customer Satisfaction Study,^SM released today. Satisfaction with tires fitted to gas-powered vehicles is the primary driver of the increase, but surprisingly, satisfaction with tires fitted to electric vehicles (EVs) increases 62 points from a year ago.

The annual study measures tire owner satisfaction in four areas (in order of importance): tire ride; tire wear; tire traction/handling; and tire appearance. The study includes four vehicle segments: luxury; passenger car; performance sport; and truck/utility. The performance sport segment is not award eligible due to an insufficient number of brands ranked. 

“The industry’s focus on EV tire performance shows, especially in terms of lack of vibration and quietness on the road, as compared to non-EVs,” said Ashley Edgar, senior director of benchmarking and alternative mobility at JD Power. “As electric vehicle market share increases, it is imperative for both the EV manufacturers and tire manufacturers to collaborate to fine-tune these areas as they play such a large role in EV performance and tire satisfaction.”

Study Rankings

Michelin ranks highest in the luxury segment with a score of 833 for a 20^th consecutive year. Goodyear (818) ranks second. The segment average is 813.

Pirelli ranks highest in the passenger car segment with a score of 828 for a second consecutive year. Michelin (827) ranks second and BFGoodrich (825) ranks third.

Michelin ranks highest in the truck/utility segment with a score of 809. Bridgestone ranks second (801) and Continental ranks third (798).

The 2023 U.S. Original Equipment Tire Customer Satisfaction Study is based on responses from 32,151 owners of 2021 and 2022 model-year vehicles and was fielded from August through December 2022.

For more information about the U.S. Original Equipment Tire Customer Satisfaction Study visit https://www.jdpower.com/business/resource/us-original-equipment-tire-customer-satisfaction-study.

About JD Power

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

Rising Rates Short Circuit Electric Vehicle Home Charging Satisfaction, JD Power Finds

2023-03-15

jillian.breska

TROY, Mich.: 16 March 2023 — The growing electric vehicle (EV)[¹ marketplace has encountered rising electricity rates due in part to the recent U.S. inflationary period, resulting in lower satisfaction with home charging, according to the JD Power 2023 U.S. Electric Vehicle Experience (EVX) Home Charging Study,^SM released today. More than two-thirds (68%) of EV owners use a Level 2 permanently mounted station, but their overall satisfaction declines 12 points year over year to 740 (on a 1,000-point scale).

While Level 2 portable and Level 2 permanently mounted charging stations are utilized by 83% of all users, their satisfaction with the cost of charging declines from the 2022 study by more than 30 points in each segment. Also driving down overall satisfaction in the study is speed for all three home charging segments.² The 2023 study finds that owners of 2022 and 2023 model EVs are less satisfied with their home charging speed (605 and 597, respectively) than owners of 2021 model EVs (616) and 2020 model EVs (608).

“Whether you’re an automaker, dealer or utility company participating in the EV ecosystem, improving the EV owner experience with respect to home charging should be a common goal shared by all,” said Brent Gruber, executive director of the EV practice at JD Power. “There are programs available today that will help EV owners with the startup costs, such as installing or upgrading to a faster Level 2 charger. There are also programs designed to save EV owners money with the ongoing costs of charging their vehicle, like scheduling to charge during the most affordable time of the day. However, JD Power sees that there is little awareness and utilization of these benefits. As the EV marketplace continues to grow, brands that help owners take advantage of these offerings will be in a much better position down the road.”

Satisfaction is measured across eight factors: fairness of retail price; cord length; size of charger; ease of winding/storing cable; cost of charging; charging speed; ease of use; and reliability. These factors provide a comprehensive assessment of the owner experience and charger performance.

Following are key findings of the 2023 study:

• As electricity rates increase, educating owners becomes more critical: Just 51% of EV owners say they are knowledgeable about utility company programs for charging their vehicle at home, which is up slightly from 49% a year ago. “Customers are looking to utility companies to help manage rising costs,” said Adrian Chung, director of utilities intelligence at JD Power. “By increasing awareness of available rebates or incentives, EV owners will benefit. This can snowball into helping potential EV owners make a more informed purchase decision, as well as minimizing home charging concerns and supporting greater EV adoption.”
• Scheduling charge time increases satisfaction: More than one-third (35%) of owners say they always schedule a time to charge their vehicle at home, while 49% do not use any scheduling. Among those choosing to schedule home charging via an app, satisfaction is highest when using the vehicle mobile app (739) rather than the charger mobile app (706).
• Geography makes a difference with charging satisfaction: Overall satisfaction with Level 2 home charging is lower in all nine regions in this year’s study than a year ago, with New England having the largest decline of 27 points. The Level 2 satisfaction gap between regions is now 96 points (+20 from a year ago), ranging from a low of 689 in the New England region to a high of 785 in the East South Central region.
• Home charging game changer: Satisfaction improves 179 points when moving up from a Level 1 portable charger (561) to a Level 2 permanently mounted charger (740). Across the eight factors in the study, owner satisfaction is higher in seven factors once the switch is made to a Level 2 permanently mounted charger, especially with charging speed (+373 points). A majority (60%) of current Level 1 users say they are likely to upgrade their home charging station to either a Level 2 permanently mounted charger or a Level 2 portable unit.

Study Ranking

The study examines the home charging experience of EV owners across all three charger segments, but only the Level 2 permanently mounted charging station segment is award eligible.

Tesla ranks highest among Level 2 permanently mounted charging stations with a score of 790. GRIZZL-E (757) ranks second and Emporia (754) ranks third. The segment average is 740.

The U.S. Electric Vehicle Experience (EVX) Home Charging Study, now in its third year, is driven by a collaboration with PlugShare, the leading EV driver app maker and research firm. This study sets the standard for benchmarking satisfaction with the critical attributes that affect the total or overall EV home charging experience for both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Survey respondents for the study included 13,860 owners of 2017-2023 model year BEVs and PHEVs. The study was fielded from December 2022 through February 2023.

For more information about the U.S. Electric Vehicle Experience (EVX) Home Charging Study, visit https://www.jdpower.com/business/automotive/electric-vehicle-experience-evx-home-charging-study.

About PlugShare

Based in El Segundo, Calif., PlugShare maintains the most comprehensive census of EV infrastructure in the world. They make the PlugShare app for iOS, Android and the Web, the most popular EV driver app globally, in use by most drivers in North America and over one million EV drivers worldwide. PlugShare also provides sophisticated data tools, reports, custom consulting and comprehensive research on EVs for automakers, utilities, charging networks, government and the rest of the EV industry. It operates the world’s largest EV driver survey research panel, PlugInsights, now with over 63,000 members.

About JD Power

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info

¹Electric vehicles (EV) include battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV).
²JD Power defines charger segments as Level 1 portable; Level 2 portable; or Level 2 permanently mounted (permanent). Level 1 portable charging stations offer simple electric vehicle charging capabilities at home through a standard 120-volt electrical outlet. Level 2 portable charging stations offer faster charging capabilities at home through an upgraded 240-volt electrical outlet. Level 2 permanently mounted charging stations use an upgraded 240-volt electrical outlet via a permanently wall-mounted format.

 

Consumer Spending on New Vehicles Sets Q1 Record; March Total New-Vehicle Sales Pace Increases

2023-03-22

jillian.breska

The Total Sales Forecast

Total new-vehicle sales for March 2023, including retail and non-retail transactions, are projected to reach 1,330,700 units, a 6.2% increase from March 2022, according to a joint forecast from JD Power and LMC Automotive. March 2023 has the same number of selling days as March 2022.

New-vehicle total sales for Q1 2023 are projected to reach 3,526,700 units, a 7.3% increase from Q1 2022 when adjusted for selling days.

The Retail Sales Forecast

New-vehicle retail sales for March 2023 are expected to increase when compared with March 2022. Retail sales of new vehicles this month are expected to reach 1,090,500 units, a 1.9 increase from March 2022.

New-vehicle retail sales for Q1 2023 are projected to reach 2,858,500 units, a 0.2% increase from Q1 2022 when adjusted for selling days.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“March is shaping up to be yet another positive month for the industry. With retail sales forecasted to be up nearly 2%—along with average transaction prices tracking up 3.5%— consumers are on pace to spend nearly $50 billion this month, an increase of 5.5% from what they spent on new vehicles a year ago.

“Retail demand for vehicles remains strong, due primarily to considerable pent-up demand. The availability of new vehicles in inventory at retailers is improving, resulting in a softening of dealer margins and increased manufacturer incentive spending. But, overall, the industry remains supply constrained, and profitability is well above historical norms.

“This dynamic of high transaction prices despite increased production levels is being assisted by an increased manufacturer focus on sales to fleet customers. Rather than allocate incremental production to retailers, manufacturers are selling more vehicles to fleet buyers. Sales to fleet buyers are expected to increase 31% from a year ago.”

New-vehicle transaction prices continue to rise, with the average price reaching a March record of $45,818. This is a 3.5% increase from a year ago.

The record transaction prices means that consumers are on track to spend nearly $50.0 billion on new vehicles this month—the second-highest for the month of March and an increase of 5.5% from March 2022. For the first quarter of 2023, consumers spent more than $132 billion on new vehicles, the highest on record for any quarter and 4.4% higher than Q1 2022.

“As expected with improved supply, dealer profits are taking a step back but remain well above pre-pandemic levels. Total retailer profit per unit—inclusive of grosses and finance and insurance income—is on pace to be $3,761. This is down 23.4% from a year ago but still more than double 2019. The decline is due primarily to fewer vehicles being sold above MSRP. In March, 30% of new vehicles are being sold above MSRP, down from the high of 48% in July 2022.”

Total aggregate retailer profit from new-vehicle sales for the month of March is projected to be down 22% from March 2022, reaching $4.1 billion for the second-highest March on record.

“Dealerships are still pre-selling a large portion of their inventory allocation, but increased supply means more buyers are purchasing vehicles that are in inventory at a dealership. This month, 44% of vehicles will be sold within 10 days of arriving at a dealership, down from a high of 57% in March 2022. The average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 30 days—up from 18 days a year ago—but still less than half the pre-pandemic average of 70 days.

“Manufacturer discounts are up slightly from a month ago and up significantly from a year ago, but they remain historically low. The average incentive spend per vehicle is tracking toward $1,558, a 45.2% increase from a year ago. Incentive spending per vehicle expressed as a percentage of the average vehicle MSRP is trending at 3.3%, down 0.9 percentage points from March 2022. One of the factors contributing to the low level of spending is the absence of discounts on vehicles that are leased. This month, leasing accounts for just 20% of retail sales. In March 2019, leases accounted for 31% of all new-vehicle retail sales.

“Elevated pricing coupled with interest rate increases continue to inflate monthly loan payments. After breaking the $700 level for the first time ever in July 2022, the average monthly finance payment in March is on pace to be $711, up $46 from March 2022. That translates to a 6.8% increase in monthly payments from a year ago. The average interest rate for new-vehicle loans is expected to be 6.7%, an increase of 228 basis points from a year ago.

“Used-vehicle prices are falling which is resulting in less trade-in equity for new-vehicle buyers who have a vehicle to trade. The average trade-in equity for March is trending toward $8,800, down $430 from a year ago and down $1,240 since the peak in June 2022. For context, March 2023 trade equity is still more than double the pre-pandemic level, helping owners that have a vehicle to trade in offset some of the pricing and interest rate increases.

“Overall, the first quarter of 2023 has been another period of remarkable profitability for both manufacturers and retailers. While the profit results for retailers are less favorable than a year ago, it will still be the second-best quarter on record. However, as vehicle production continues to increase during the year, interest rates will remain high, pent-up demand will diminish, pricing will become more competitive and profitability will inevitably degrade. Regardless, the industry is still positioned to enjoy one of the most profitable years on record.”

Sales & SAAR Comparison

U.S. New Vehicle	March 20231, 2	February 2023	March 2022
Retail Sales	1,090,495 units (1.9% higher than March 2022)2	912,982 units	1,070,556 units
Total Sales	1,330,743 units (6.2% higher than March 2022)2	1,144,092 units	1,253,373 units
Retail SAAR	11.9 million units	12.3 million units	11.6 million units
Total SAAR	14.4 million units	15.0 million units	13.5 million units

¹ Figures cited for March 2023 are forecasted based on the first 16 selling days of the month.
² March 2023 has 27 selling days, the same as March 2022.

The Details

• The average new-vehicle retail transaction price in March is expected to reach $45,818, a 3.5% increase from March 2022. The previous high for any month—$47,362—was set in December 2022.
• Average incentive spending per unit in March is expected to reach $1,558, up from $1,073 in March 2022. Spending as a percentage of the average MSRP is expected to increase to 3.3%, up 0.9 percentage points from March 2022.
• Average incentive spending per unit on trucks/SUVs in March is expected to be $1,627, up $545 from a year ago, while the average spending on cars is expected to be $1,302, up $264 from a year ago.
• Retail buyers are on pace to spend $50.0 billion on new vehicles, up $2.6 billion from March 2022.
• Truck/SUVs are on pace to account for 77.5% of new-vehicle retail sales in March.
• Fleet sales are expected to total 240,200 units in March, up 31.4% from March 2022 on a selling day adjusted basis. Fleet volume is expected to account for 19% of total light-vehicle sales, up from 15% a year ago.
• Average interest rates for new-vehicle loans are expected to increase to 6.66%, 228 basis points higher than a year ago.

EV Outlook

Elizabeth Krear, vice president, electric vehicle practice at JD Power:
“As EV market share reaches 8.5%, the JD Power EV Index, which tracks the transition from ICE to EV, increased 2 points in February, and now stands at 49. EV market dynamics are as volatile as ever, particularly with IRA taking effect. Some EV Index factors are improving, such as Interest; Availability; and Affordability, while Infrastructure and Experience factors are sliding.

“Affordability has increased 6.6 points since December, closing February with a score of 87.4. This is driven primarily by the lifting of volume caps for key players Tesla and General Motors. Interpretations of the IRA has opened more inclusion for leasing, which is also helping.

“Interest remains strong for EVs in the mass market segment, with Ford F-150 Lightning coming in as the most considered model, followed by Toyota bZ4X. Interest in premium brands follows pricing fluctuations, with the Cadillac LYRIQ seeing the highest gain in 2023. The EV landscape is changing quickly. Newer models are bringing in more mainstream, first-time buyers who expect build quality and dependability to be on par with ICE vehicles.”

Global Sales Outlook

Jeff Schuster, group head and executive vice president, automotive at GlobalData, parent of LMC Automotive:
“The global light-vehicle selling rate fell in February to 81 million units from 83 million units in January. On a year-over-year basis, volume was up 10% to 6.5 million units, as drag from global supply constraints remain a factor in the month’s performance. Individual markets continue to vary in the recovery path, though there was some consistency in February. Japan and Korea led mature markets, with volume up 21% and 20%, respectively. North America, Western Europe, China and India were all up approximately 10% from February 2022.

“As March ends, we expect global light-vehicle sales to finish at 7.7 million units, up nearly 5% from March 2022. The selling rate is expected to slip to 79.1 million units, which is still an increase from 76.7 million units in March 2022. Of the major markets, China is expected to pull down sales in March with volume projected to be 2% lower year over year.

“The automotive environment in 2023 remains challenging and while there are some warning signs in the banking industry and with the general economy, the outlook for global vehicle sales has been increased by 200,000 from a month ago to 86.1 million units, up 6.2% from 2022. Supply disruption is expected to continue to ease, shifting the level of recovery over to the consumer to decide.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.com

 

JD Power and Motorq Collaborate to Measure Real World Electric Vehicle Battery Health

2023-03-27

jillian.breska

TROY, Mich.: 29 March 2023 — JD Power, a global leader in data analytics and consumer intelligence, and Motorq, the leading connected vehicle analytics and infrastructure company, have announced a strategic alliance to provide the automotive industry with insights based on connected vehicle data. The first product from the alliance will measure real-world electric vehicle (EV) battery health. Using data provided by the vehicle itself, in close collaboration with the manufacturers, JD Power and Motorq will provide EV owners and potential buyers with an independent measurement of the health of that vehicle’s EV battery, compared with its stated health when new. Individual vehicles that achieve a pre-specified score will receive a JD Power validation that will give potential buyers confidence in the health of the EV battery.

“EV shoppers have concerns about range and battery longevity,” said Dave Sargent, vice president and head of connected vehicles at JD Power. “For used EVs, the range can be affected by a number of factors including how the vehicle has been driven and charged, and the temperature where it is being operated. By measuring the precise state of health of an individual EV battery over time, JD Power and Motorq will provide transparency into an area where it is difficult for the consumer to make their own assessment. This information will give used EV shoppers greater confidence that they are buying a high-quality vehicle at a fair price.”

“The most useful way of measuring the health of an EV battery is to see how it performs in the real world,” said Arun Rajagopalan, co-founder and CEO of Motorq. “We have developed a capability that leverages thousands of data points a day from each vehicle, takes account of different operating conditions and provides a normalized assessment of the true health of each individual vehicle’s battery.”

JD Power and Motorq will use thousands of measurements taken from the vehicle over time to assess how an individual EV battery is performing. The two companies are in active discussions with vehicle manufacturers and other industry participants to bring empirical EV battery health to the marketplace.

About Motorq
Motorq is the leading connected vehicle infrastructure and analytics software company. We partner with the 12 largest global auto manufacturers to ingest and analyze real-time data from vehicles, and create business value for nine of the top 10 fleet management companies, automotive service companies, and the world’s largest sales, service and rental fleets.  

The robust Motorq Platform normalizes and analyze billions of data points to power our portals, streams, APIs and products such as Fuel EKG™, Driver Safety Scorecard, and Electric Vehicle battery health and home charging reimbursement. Our privacy and security frameworks are the benchmark for the industry. 

Motorq is headquartered in San Francisco with presence in the United States, Europe and India. For more information, visit www.motorq.com or reach us at [email protected].

About JD Power
JD Power is a global leader in data and analytics, advisory services and consumer insights. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; 714-621-6224; [email protected]
Kara Foran, Motorq; 916-221-8701; [email protected]

 

JD Power Announces 2023 U.S. ALG Residual Value Awards

2022-11-16

TROY, Mich.: 17 Nov. 2022 — The resale value a vehicle carries is consistently cited¹ as one of the most important elements vehicle shoppers consider when purchasing a new vehicle. The JD Power 2023 ALG Residual Value Awards,^SM released today, have increased importance in today’s market for both automakers and consumers, given the recent increases in the cost of new and used vehicles.

For a third consecutive year, Lexus receives the brand award for best premium brand. For a second consecutive year, Honda receives the brand award for best mass market brand. Kia receives the most model awards overall and is the most improved mass market brand year over year, moving up three places. Porsche is the most improved premium brand, moving up four places.

“This year’s achievement by Kia speaks volumes about how far the brand has come,” said Eric Lyman, vice president of ALG, the division of JD Power recognized as the industry benchmark of automotive residual value projections. “The marketplace is acknowledging that Kia has a very strong product lineup in terms of design, quality and residual values. Kia has become a force to be reckoned with.”

For model year 2023, 13 different brands receive awards in 29 segments, which is six fewer brand recipients than a year ago. The 2023 award process consisted of evaluating 291 models through analysis of used-vehicle performance, brand outlook and product competitiveness. Eligibility for a brand award requires a manufacturer to have model line entries in at least four different vehicle segments. To account for differences across trim levels, model averages are weighted based on percentage share relative to the entire model line. For a segment to qualify for an award, at least four different brands must be included. This year, the large car segment has only three model lines, so it does not qualify to have a segment recipient.

Model-Level Residual Value Awards

Kia receives the most model-level awards, with five. Honda and Toyota each receive four model-level awards. Model award recipients include:  

• Kia: K5, Rio, Sportage, Soul and Telluride
• Honda: Civic, Passport, HR-V and Odyssey
• Toyota: GR Supra, 4Runner, Tacoma and Tundra
• Land Rover: Range Rover Velar, Discovery and Range Rover Evoque
• Chevrolet: Bolt EV and Silverado 2500 HD
• Lexus: IS and LX
• Mercedes-Benz: AMG GT 4-Door and Metris
• Porsche: 911 and Macan
• Acura: Integra
• Audi: A6 Allroad
• GMC: HUMMER EV Pickup
• Jeep: Wagoneer
• Subaru:  WRX

The U.S. ALG Residual Value Awards are the automotive industry standard in recognizing vehicle models projected to hold the highest percentage of their manufacturer’s suggested retail price following a three-year period of ownership. This value retention is a key variable in the lease cost of a vehicle, underscoring an automaker’s success in the areas of long-term quality and design, as well as the overall desirability of automotive brands and their models.

Numerous variables affect the actual residual value of a vehicle over a multi-year lease term. Examples include mileage, quality/reliability, options and feature sets, weather and macroeconomic environment. Since these factors need to be taken into account in order to accurately forecast residual values, the more granularity and greater the understanding of the effect of each variable, the better equipped manufacturers and lenders are to be able to maximize profitability. The combination of JD Power insights and data with the deep experience of ALG in residual values allows for even more accurate end-of-lease forecasting capabilities.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

¹JD Power U.S. Sales Satisfaction Index (SSI) Study^SM

 

Manufacturer Apps for Gas-Powered Vehicles Still Struggle to Meet Owner Expectations, JD Power Finds

2022-11-30

TROY, Mich.: 1 Dec. 2022 — While remote control function speeds and accuracy are improving on original equipment manufacturer (OEM) mobile apps for vehicles with internal combustion engines (ICE), many apps still do not execute the desired task in a reasonable amount of time. According to the JD Power 2022 U.S. OEM ICE App Benchmark Study,^SM released today, many apps fall short of owners’ desire to complete a task in 10 seconds or less.

Overall satisfaction is 699 (on a 1,000-point scale), which highlights manufacturers’ need for continued focus on app content, transparency, accuracy and software stability. No single OEM app is the top performer in all of these key areas.

JD Power continues to work with manufacturers to improve the user experience with their brand’s app. The OEM smartphone app continues to be problematic, as evidenced in the JD Power 2022 U.S. Initial Quality Study (IQS),^SM as owners find the mobile app to be the second-most problematic feature on their vehicles. Issues with connectivity and incorrect information are plaguing apps and creating dissatisfaction for users which causes many owners to abandon their brand’s app.

“Some OEM apps are quickly implementing new functionality such as vehicle settings, advanced climate control functionality, and Phone as a Key (PaaK),” said Jason Norton, senior manager of global automotive consulting at JD Power. “However, many OEM apps still lack basic functionality. For example, while an app may provide users the ability to lock or unlock their vehicle remotely, the app fails to provide information on if their vehicle is locked or unlocked. The lack of current vehicle status creates an unknown for users and hinders the overall usefulness of the app.”

Following are key findings of the 2022 study:

• Phone as a Key (PaaK): Only 16% of OEM ICE apps provide Phone as a Key (PaaK) technology, falling well short of the 40% provided by OEM EV apps.[1] As this is a highly desired feature among vehicle owners and greatly increases app usage, more manufacturers should be looking to include this technology.
• Dedicated climate control functionality scarcity: While 94% of manufacturers provide remote start within their OEM-branded app, only 34% are offering more advanced features. For example, advanced climate functions provide owners the ability to select a specific cabin temperature and activate heated/cooled seats, defrost and heated steering wheel. Allowing users to precisely select the desired precondition of the vehicle prior to departure is critical to higher customer satisfaction.
• Dealership support continues to affect app usage: More than three-fourths (86%) of survey respondents who currently use an OEM-branded app say they received dealership support when picking up their new vehicle.
• Most consumers remain unwilling to pay for app services: Nearly 60% of respondents said they are still unwilling to pay for an OEM-branded app, which is unchanged from 2021. Among those who are willing to pay for an OEM-branded app, 27% said they would not pay more than $5 per month.

Among the 32 brands in the study, the top-performing mobile apps are Mercedes me connect, my[GM] apps, MySubaru and MyINFINITI. Each of these top-performing apps execute well in each of the 12 categories analyzed in the study. However, none of these top-performing apps rank best in class for more than half of the categories reviewed.

“The study results underscore the need for every OEM—even the top performers—to focus on continuous improvement to ensure that the content and speed of the app are meeting customers’ needs and expectations,” Norton said.

The OEM ICE App Benchmark Study gauges owners’ experience with their brand’s mobile app. Insights are derived from surveying new-vehicle owners and an expert benchmarking assessment of the most relevant mobile apps. Results are based on a standardized evaluation approach relying on more than 270 best practices for vehicle apps. The expert benchmarking includes apps from 32 brands that sell gas-powered vehicles in the United States. The usage survey data represents more than 1,000 owners who said that they have used their brand’s app. The study was fielded in October 2022.

For more information about the U.S. OEM ICE App Benchmark Study, visit 
https://www.jdpower.com/business/automotive/us-oem-app-benchmark-study.

About JD Power
JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules: http://www.jdpower.com/business/about-us/press-release-info 

¹JD Power 2022 OEM EV Benchmark Study^SM

 

Up, Up and Up in December: New-Vehicle Sales Increase, Transaction Prices Hit Record High and Inventory Rises

2022-12-21

The Total Sales Forecast

Total new-vehicle sales for December 2022, including retail and non-retail transactions, are projected to reach 1,254,700 units, a 5.3% increase from December 2021, according to a joint forecast from JD Power and LMC Automotive. December 2022 has the same number of selling days as December 2021.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 13.2 million units, up 0.7 million units from 2021. New-vehicle total sales in Q4 2022 are projected to reach 3,549,800 units, a 9.6% increase from Q4 2021 when adjusted for selling days. New-vehicle total sales for 2022 are projected to reach 13,687,000 units, an 8.4% decrease from 2021 when adjusted for selling days.

The Retail Sales Forecast

New-vehicle retail sales for December 2022 are expected to decline when compared with December 2021. Retail sales of new vehicles this month are expected to reach 1,039,200 units, a 2.8% decrease from December 2021. New-vehicle retail sales in Q4 2022 are projected to reach 2,938,500 units, a 1.3% increase from Q4 2021 when adjusted for selling days. New-vehicle retail sales for 2022 are projected to reach 11,648,200 units, an 11.3% decrease from 2021 when adjusted for selling days.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“Retail inventory in December is expected to finish its third consecutive month at more than one million units. With the improving inventory levels, December total sales volume will be up from a year ago, however there are still not enough vehicles produced to meet demand. Transaction prices will hit a record high for the month even with shoppers becoming a bit more sensitive to retailer mark-up addendums over MSRP. The reduction in mark-ups is pushing dealer profits off their record high levels, however, per-unit profitably is still nearly double pre-pandemic levels.

“While the inventory situation has improved modestly in the fourth quarter, supply remains well below the level at which consumer demand for new vehicles can be met. New-vehicle transaction prices continue to rise—albeit at a slower pace than earlier this year. The average price in December will set a record of $46,382, an increase of 2.5% from a year ago.”

The record transaction prices means that buyers are on track to spend nearly $48.2 billion on new vehicles this month—the third highest level ever for the month of December and a slight 0.3% decrease from December 2021.

“Dealer profits per unit are off their record highs mostly due to a reduction in dealer addendums but remain extremely strong. Total retailer profit per unit—inclusive of grosses and finance and insurance income—is on pace to be $4,144, down 19.8% from a year ago but still more than double 2019 levels. The decline is due primarily to fewer vehicles being sold above MSRP. In December, 37% of new vehicles are being sold above MSRP, down from 50% in July 2022.”

Total aggregate retailer profit from new-vehicle sales for the month of December is projected to be down 22.0% from December 2021, reaching $4.3 billion for the second-best December on record.

“Dealerships are continuing to pre-sell a good portion of their available inventory allocation, but increased production means vehicles are spending slightly more time at dealerships. This month, 47% of vehicles will be sold within 10 days of arriving at a dealership, down from a high of 57% in March. The average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 23 days—up from 18 days a year ago.

“Manufacturer discounts are up slightly from a month ago, however, they remain historically suppressed. The average incentive spend per vehicle is tracking toward $1,187, a decrease of 21.4% from a year ago. Incentive spending per vehicle expressed as a percentage of the average vehicle MSRP is trending at 2.5%, down 0.8 percentage points from December 2021. One of the factors contributing to the low level of spending is the absence of discounts on vehicles that are leased. This month, leasing is accounting for just 18% of retail sales. In December 2019, leases accounted for 30% of all new-vehicle retail sales.

“Elevated pricing coupled with repeated interest rate increases continue to inflate monthly loan payments. After breaking the $700 level for the first time on record in July, the average monthly finance payment in December is on pace to be $718, up $47 from December 2021. That translates to a 7.0% increase in monthly payments from a year ago. The average interest rate for new-vehicle loans is expected to increase 247 basis points from a year ago to 6.4%.

Used-vehicle prices are falling modestly which is resulting in less trade-in equity for new vehicle buyers. The average trade-in equity for December is trending toward $9,316, a -3.1% ($297) decrease from a year ago and down $786 since the peak in June 2022. For context, December 2022 trade equity is still more than double the pre-pandemic level helping consumers that have a vehicle to trade in offset some of the pricing and interest rate increases.   

“Full year 2022 will show a total sales decrease from 2021 due to production constraints. The year-over-year sales increases experienced for the final five months of 2022 were not enough to offset the year-over-year sales declines in the first half of 2022 which are compared with the record sales pace in the first half of 2021. Pricing and per unit profitability will achieve record levels for full-year results. Overall, despite limited production constraining sales volume, the industry is closing out the year with strong underlying financial results.

“Looking at 2023, retail sales will continue to be dictated by the number of vehicles shipped to dealerships. Indications are that shipments will rise incrementally throughout the year, allowing sales to increase from 2022 levels. However, even with the probability of an economic downturn, pent-up consumer demand from the past two years will keep inventory levels relatively low. Therefore, 2023 is likely to be another year of relative healthy pricing and profitability.”

Sales & SAAR Comparison

U.S. New Vehicle	December 20221, 2	November 2022	December 2021
Retail Sales	1,039,218 units (-2.8% lower than December 2021)2	916,666 units	1,068,924 units
Total Sales	1,254,744 units (5.3% higher December 2021)2	1,121,975 units	1,191,372 units
Retail SAAR	11.1 million units	11.1 million units	11.4 million units
Total SAAR	13.2 million units	14.0 million units	12.5 million units

¹ Figures cited for December 2022 are forecasted based on the first 15 selling days of the month.
² December 2022 has 27 selling days, the same as December 2021.

The Details

• The average new-vehicle retail transaction price in December is expected to reach $46,382, a 2.5% increase from December 2021. The previous high for any month—$46,171—was set in July 2022.
• Average incentive spending per unit in December is expected to reach $1,187, down from $1,511 in December 2021. Spending as a percentage of the average MSRP is expected to fall to 2.5%, down 0.8 percentage points from December 2021.
• Average incentive spending per unit on trucks/SUVs in December is expected to be $1,211, down $296 from a year ago, while the average spending on cars is expected to be $1,233, down $292 from a year ago.
• Retail buyers are on pace to spend $48.2 billion on new vehicles, down $0.2 billion from December 2021.
• Truck/SUVs are on pace to account for 77.6% of new-vehicle retail sales in December.
• Fleet sales are expected to total 215,500 units in December, up 76.0% from December 2021 on a selling day adjusted basis. Fleet volume is expected to account for 17% of total light-vehicle sales, up from 10% a year ago.
• Average interest rates for new vehicle loans are expected to increase to 6.40%, 247 basis points higher than a year ago.

EV Outlook

Elizabeth Krear, vice president, electric vehicle practice at JD Power:
“It may seem counter-intuitive but, in the past year, true adoption of EVs has declined as consumer interest and vehicle availability have increased. Simply put, availability has nearly doubled but sales have not kept pace. The JD Power EV Index will launch next month, tracking the transition from ICE vehicles to EVs by monitoring six key factors: interest, availability, adoption, affordability, infrastructure and experience. We’ll have greater insight to share then.

“Right now, price and lack of public charging are the top two barriers to EV adoption. Affordability declined primarily because of Tesla price hikes, the rich launch of the Ford F-150 Lightning and the Inflation Reduction Act that disqualified 15 vehicles from receiving the tax credit because they didn’t meet North America manufacturers’ origin criteria.”

Global Sales Outlook

Jeff Schuster, president, global forecasts, LMC Automotive, a GlobalData company:
“November global light-vehicle sales came in slightly weaker than expected with an 83.6 million unit selling rate, but it was still nearly 3 million units stronger than November 2021. Volume was up just 3% year over year, as market volatility continued to affect the overall global recovery. Specifically, the Chinese market decelerated sharply, posting a decline of 7% from a year ago, and Eastern Europe was off nearly 20%. India led the markets that improved (+28%), followed by Western Europe (+15%), North America (+12%) and South America (+9%).

“December’s selling rate is expected to slip below 80 million units, the weakest level since May of this year. Volume is projected at 7.1 million units, a contraction of 4% year over year as the compounding issues of supply constraints, weaker demand from inflationary pressure and geopolitical uncertainty drives the lower forecast.

“With less than one month of sales to finish the year, the outlook has been trimmed further on weaker-than-expected performance continuing through December. The year is projected to finish at 80.7 million units, a contraction of 1% from 2021. We expect 2023 to carry a high level of risk and uncertainty as several markets could be dealing with a recession. Nonetheless, we forecast a 6% increase to 85.7 million units. This is up slightly from last month, as the current pullback in China is sooner than initially expected, raising the outlook for next year slightly. There remains a high level of risk related to a weaker global economy and affordability concerns in many markets. Factoring risk could bring the forecast down by as much as 2 million units to 83.5 million units for the year.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Emmie Littlejohn, LMC Automotive; Troy, Mich.; 248-817-2100; [email protected]

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