Auto Industry sees 11 million as the new benchmark

Auto Industry sees 11 million as the new benchmark

Automakers selling new vehicles in the U.S. are tailoring their business model around a new-vehicle sales volume of 11 million units per year, a significant four to five million units less than the 15 or 16 million previously considered the norm, but an improvement over 2009.

The lower benchmark is having a marked impact across the industry, with auto dealers in particular having to adopt more rounded business operations to achieve profitability, while consumers are coming to recognize that pricing discounts will be far fewer than in years past.

This change is being reflected in average MSRP for new vehicles climbing 7.39 percent year-over-year and actual transaction prices jumping an even heftier 16.8 percent, according to data gathered by CNW Marketing, which tracks this information.

CNW notes that incentive levels continue to trend downward and are now about 20 percent lower, for both manufacturers and dealers, compared to levels a year ago.

CNW says that consumers are taking more time to research vehicles before buying and doing considerably more price comparing than in previous years. Typically, consumers take six months to make a decision on buying a vehicle, but that has now increased to nearly nine months, CNW finds.