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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.

Audi boss can't say no to F1 program

Audi has been a dominant force at the top rung of endurance racing for over a decade. Still, rumors have fired up again about the possibility of the company making a big switch to Formula 1. The Four Rings' boss Rupert Stadler isn't ready to make that decision yet, but he's not ruling it out. When asked by Auto Express about the potential of Audi entering F1 in the next five years, Stadler gave an intriguing answer. "It's something we're looking at, but then we're always looking at it and many other things. But I can't say yes or no," he said. While not at all a confirmation, that's hardly an outright denial, either. According to unnamed insiders speaking to Auto Express, Audi is under pressure from Volkswagen Group to leave the FIA World Endurance Championship. Right now, the Four Rings is competing directly against its corporate sibling Porsche. While that might make for a good rivalry on the track, it doesn't necessarily make sense financially. Rumors last year suggested that Audi might leave the WEC and DTM to finance the F1 project. Two possibilities were proposed at the time: act as engine supplier to Red Bull or buy Toro Rosso to run a whole new team. Stadler's non-denial might also indicate that Audi's view on F1 is shifting. In the past, the company's opinion has been much more obvious. Last year, Audi Sport tweeted that the rumormongering was "pure speculation." As far back as 2011, the brand's motorsport boss said grand prix racing had "no relevance to the road." Related Video:

Production 4.0: Audi plans for the smart factory

Automotive production is becoming more integrated and at the same time has to be more intelligent and more efficient. Flexible production of customized vehicles is one of the big challenges for the future, especially for a premium carmaker like Audi. How will the "Vorsprung durch Technik" brand meet its aim of offering premium quality with added custom flexibility? The company sees the "smart factory" as the key. Whether it's body-color moldings or light-alloy wheels in a special size, almost every car is ordered with some kind of customization, and the demands are increasing. This requires of course already a lot of flexibility. While the variety of models and quality demands are increasing, automotive manufacturers such as Audi are eager to make production sustainable. In an Audi interview, innovation management members Alois Brandt and Henning Loser talk about "production 4.0" and the upcoming "smart factory." How will Audi manage the production site with its very high standards of quality, efficiency, and environmental acceptability? Will the so-called "smart factory," which should be the intelligent factory of the future, only employ robots? Alois Brandt: "With a deep look into the production, I am convinced that our employees and not machines are the relevant working forces behind the Audi brand. Machines can be bought anywhere." Increasing digitalization is paving the way for the smart factory – the intelligent, digitally connected production facility. New high-tech solutions in manufacturing should further increase the high level of quality, while at the same time the assembly work should be easier and result in better ergonomics. Can you give us a clearer imagination of the "smart factory"? Alois Brandt: "There are a lot of ideas. But the big question at the moment is: Which one is really needed and leads into the right direction?" Can you tell us a little bit more about "production 4.0"? Alois Brandt: "The assembly line as we know it in the present will no longer play the same role. If it makes sense, it will be terminated and replaced by – let's call it – a virtual assembly line. The production will be more modular than before and the car will be directed to a production point – a so-called 'island of competence' – where it is needed." Henning Loser: "If the vehicle is to be assembled to the customer's wishes, it is obvious that efficient programming of robots and coordinating with the human workers is needed.