J.D. Power announced it has entered into an agreement to purchase ALG Inc., from TrueCar, Inc., for $135 million. ALG is an industry authority on automotive residual value projections in both the United States and Canada, and the acquisition is expected to augment offerings from the data & analytics division of J.D. Power.

“We believe ALG will bring complementary strengths and value to J.D. Power and its clients,” said Dave Habiger, president and CEO of J.D. Power. “For more than 50 years, ALG has been a trusted data provider to the automotive industry delivering accurate and reliable residual value forecasts. Adding that component to our extensive data assets, valuation expertise and analytic tools will enable us to provide even more value to our clients. We are excited to welcome the ALG team to J.D. Power.”

The combination of J.D. Power’s capabilities and data with ALG’s experience in residual values should allow for even more accurate end-of-lease forecasting.

The transaction is expected to close by the end of 2020 and is subject to customary closing conditions as well as regulatory review and approval. Upon approval and close, all 40 ALG employees will join J.D. Power.

ALG, TrueCars data and analytics subsidiary, projects total new vehicle sales will reach 1,399,639 units in November, down 3 percent from a year ago when adjusted for the same number of selling days. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 16.9 million units. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,193,462 units, a decrease of 2.6 percent from a year ago.

Among mainstream brands, Honda stood out for total sales, up 5.6 percent year-over-year, buoyed by an increase in incentive spending and fleet sales. Hyundai and Kia continue to perform well, up 7.8 percent and 6.1 percent, respectively, year-over-year, led by their new Palisade and Telluride vehicles.

BMW had a strong month with a 4.4 percent year-over-year sales increase and Mercedes-Benz stood out again, up 3.1 percent on total sales and 5.3 percent on retail while lowering incentives. Nissan is forecast to be down 12.4 percent in total unit sales compared to a year ago with losses expected from both its Infiniti luxury brand as well as its mainstream Nissan brand. Meanwhile FCA is expected to be down 9.2 percent, mainly attributed to aging product and a decrease in fleet sales.

ALG expects used-vehicle sales will come in flat for July.

The firm expects sales to reach 3,331,762 units, down 0.8 percent year-over-year and flat from June.

Automaker average incentive spending on new cars will reach $3,671, down $151 from June and down $297 year-over-year, ALG projects. The most notable year-over-year declines in incentive spending will come from Kia (down 17.8 percent), Toyota (down 9.3 percent) and Subaru (down 9.1 percent). Meanwhile Honda raised incentives by 4.2 percent and BMW by 3.4 percent.

Average transaction price should continue to rise, up $897 year-over-year.

ALG expects incentives as a percentage of average transaction price to be 10.8 percent, down from a year ago and down 2.8 percent from June.

ALG projects used vehicle sales for June will reach 3,215,742, down 4.2% year-over-year and down 5.8% from May.

The firm expects total new vehicle sales to reach 1,487,407 units in June, down 0.6 from a year ago when adjusted for the same number of selling days. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 17 million units for the month and is expected to remain at 17 million SAAR for 2019.

Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,203,565 units, a decrease of 6.3 percent from a year ago.

For the second quarter of 2019, ALG expects new vehicle sales will reach 4,409,295 units, down slightly, at 2%, from a year ago when adjusted for the same number of selling days.

Automaker average incentive spending will reach $3,747, down 1% or $37 year-over-year, and up 0.4% or $16 from May. However, several automakers increased incentive spending year-over-year in June, most notably Honda and Toyota, up 12.3% or $226 and 3.5% or $80 respectively.

Average transaction price (ATP) should continue to rise, up 3.1% or $1,014 year-over-year.

Incentives as a percentage of average transaction price are expected to be 11%, down 3.9% from a year ago and up 0.6% from May.

Trending News

Imports Dominate Edmunds List

Imports Dominate Edmunds List

Aug 12, 2020 Rate: 5.00

Dirt Bikes Leap in Sales

Dirt Bikes Leap in Sales

Aug 12, 2020 Rate: 0.00

Webinar Focuses on Repossessions

Webinar Focuses on Repossessions

Aug 12, 2020 Rate: 0.00