To add success upon success, the American car industry not only set a record for sales (or came close to one, depending on the counter), auto prices also hit an all-time high in December.
According to research operation Kelley Blue Book, the average transaction price for cars and light trucks reached $34,428. This was up $297 from December of last year and $248 from November.
The research firm pointed out:
“Prices continue to climb, reaching record levels, with more new product on the market than ever before, and new product iterations tend to bring higher transaction prices, particularly among luxury models,” said Akshay Anand, analyst for Kelley Blue Book. “Luxury sales spiked in December and should total over 15 percent of the market, which is more than 2 percent higher than the rest of the year’s average. In addition, SUVs and trucks continue to make up a larger share of sales, helping to boost average transaction prices.”
Ironically, Volkswagen was the top car company in terms of price with an average of $40,461. The German firm faces financial and sales turmoil around the world due to its emission scandal. Some experts put fines from the U.S. government at as high as $18 billion.
General Motors Co.’s (NYSE: GM) average transaction price was $38,902. This included Cadillac, GMC, Buick and Chevy. Just behind was Ford Motor Co. (NYSE: F) at $37,061. The number included Ford and Lincoln sales. At the bottom of the list, Hyundai Kia posted an average of $24,961.
One reasonable fear as car sales tracked to record levels was what discounts manufacturers would offer to take a larger piece of a growing pie. But low interest rates drew in new customers as much as anything else, most likely leaving discounts as a less important factor in customer purchases.
Auto sales are expected to move higher or hold next year. Based on current data, price points for average transactions should do the same.