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KBB: Flat Prices, Higher Incentive Spending Signals Headwinds for New-Car Market

November 1, 2017

IRVINE, Calif. — Transaction prices continue to rise at a slower pace, with October’s estimated average transaction price expected to rise by $101 from a year ago to $35,263, Kelley Blue Book (KBB) reported on Tuesday. Compared to September, the firm expects the average to increase by $128, or 0.4%.

“Prices in the third quarter were up just 1% after averaging 3% gains in the first half of the year,” said KBB analyst Tim Fleming. “While Kelley Blue Book expects solid sales in October 2017 at 17.9 million SAAR, flat transaction prices combined with ever-growing incentive spending signal headwinds for the new-vehicle market as 2017 nears its end.”

Expected to register the highest year-over-year increase is Fiat Chrysler, with the automaker’s average transaction price on pace to rise 4% from a year ago. The Jeep brand is expected to record a 3% increase in its average, with the redesigned Jeep Compass expected to show a 6% increase in its average.

The firm noted that the wind down of the Jeep Patriot also is helping to drive up average transaction prices for the Jeep brand.

Dodge’s average is expected to climb by 10% from a year ago on the strength of the Durango SUV and its new SRT performance trim, KBB noted.

Volkswagen Group’s average transaction prices are also expected to be among the best performers on a year-over-year basis, rising 2% for the month. The Volkswagen brand alone is expected to show a 4% increase in its average transaction price, thanks, in part, to the recently introduced Atlas SUV and redesigned Tiguan (expected to be up 6%).

The firm said it expects Audi to show a 4% increase in its average transaction price, with the redesigned A5 expected to show a 4% increase on the strength of its new Sportback body style.

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