New GMC vehicle average transaction prices (ATPs) rose sharply year-over-year in February 2023 at $61,694, jumping 9.0 percent compared to February 2022’s $56,625 ATP.
Increasing vehicle supply and bigger incentives are driving down prices month-over-month in the whole auto sector, however. GMC wasn’t immune to this trend and saw its ATP drop 3.9 percent, Kelley Blue Book and Cox Automotive report, in spite of the annual price gain.
GMC’s year-over-year prices have been rising since at least November. Relative to 12 months earlier, average transaction prices for the brand were stable in November 2022. Gains started to pick up thereafter, reaching 3.7 percent in December and soaring 8.8 percent in January 2023.
GM’s average prices as a whole remained nearly stable compared to February 2022, with GMC’s gains counterbalancing Buick and Cadillac declines to produce an overall 0.6 percent gain to $51,165. On the monthly scale, GM’s average transaction prices slumped 1.4 percent relative to January 2023.
Zooming out to the whole automotive industry, ATP rose 5.3 percent year-over-year, while dropping 1.4 percent from last month. Sales volumes for February 2023 surged 9 percent on both monthly and annual timescales.
Automakers starting to offer larger incentives again accounted for the dropping month-over-month new-vehicle average transaction price, the study says. ATP might have declined more if not for a mix favoring high-priced luxury vehicles. Luxury sales racked up 19.5 percent of the total, much higher than their 13.2 percent share in pre-pandemic February 2018.
Changing market conditions are also visible in the narrowing gap between actual sales price and MSRP or sticker price. Retailers across the automotive sector were charging ATPs approximately $1,000 higher than MSRP a year ago. This year, industry ATP is only $95 higher than sticker price, less than 10 percent of the difference during February 2022.
The gap between ATP and MSRP is now paper-thin for non-luxury car brands, KBB reports. Honda and Kia, the strongest performers in the non-luxury sector, eked out ATPs four to six percent above MSRP. The difference was even less for GMC, Ford, and a lineup of other brands and companies focused on everyday rather than luxury vehicles.
As loan rates climb and inflationary pressures continue to affect the market, non-luxury brands, including Big Red, are offering higher incentives than they have in months, meaning declining ATP is likely to continue for the near-term at least.