Car prices have been rather overexcited with all the drama of the pandemic. A fierce case of “line go up” has been at play, with average transaction prices reaching a new record of $45,031 last month. That’s nothing to Chevrolet, however. The company’s average sale in September clocked in at $50,451, reports GM Authority.
That figure is up a full 7.1 percent from August, in which Chevrolet posted an already strong $47,095 average transaction price. It’s also 23.3 higher than the same time last year, when the US was in the thick of battling vicious COVID-19 outbreaks.
Perhaps most surprising is the fact that Chevrolet has been outperforming the industry average. As GM’s mass-market brand, one would typically expect Chevrolet to come in below the average with luxury automakers dragging the figure higher. However, sales of pricier SUVs and trucks have been strong in comparison to more budget-friendly vehicles. Thus, Chevrolet’s average sale price has climbed significantly.
High-dollar premium vehicles like the C8 Corvette also help drive up the numbers. Serving as Chevrolet’s halo performance model, Corvettes went out the door for an average price of $89,788 last month. That’s a significant chunk of change above the cheapest base model, which stickers at just $60,995.
Speaking on the data from Kelley Blue Book, analyst Kayla Reynolds notes that “The record-high prices in September are mostly a result of the mix of vehicles sold.” With chip shortages limiting production across the industry, dealers are short on new cars to sell. By the law of supply and demand, that pushes prices higher. Many dealers are cutting incentives with more buyers in the market than cars at the moment. Furthermore, automakers are focusing on producing high-margin vehicles with what limited stock they have, further driving up the average transaction price.
It all sounds very rosy for Chevrolet and General Motors, but the average transaction price doesn’t tell the whole story. Chevrolet only shifted 286,257 vehicles in Q3, compared to 449,134 over the same period last year. Without the parts to make more vehicles, the company simply can’t shift the numbers it’s used to. It’s a huge drop, and a significant part of why GM is looking set to post its worst sales figures since 1958. It also impacts on profits, with higher transaction prices unlikely to make up for drastically lower volumes.
The chip shortage likely won’t abate for some time, so expect dealer lots to remain sparse and average transaction prices to creep up further. If you don’t need a new car right now, it might pay to hold off until the market cools.
Source: Read Full Article