“Given how well compact utilities meet consumer functionality and fuel-economy needs, smart auto makers have leaned into the segment and benefitted from significantly higher revenue and margins.”
TrueCar said its research shows compact utilities is the only segment to have experienced double-digit discount growth (as a percent of MSRP) in the past 12 months on a year-over-year basis as fuel prices have declined and more segment capacity has been added.
TrueCar contends there is a relationship between incentives and gasoline prices. When gasoline experiences a notable price drop, compact utility incentives rise. Since the segment is a large revenue generator with strong margins, automakers prioritize retail incentives over fleet sales to drive volume.
“Honda has embraced the secular shift to utility vehicles and made appropriate adjustments in their product and capacity plans,” said Krafcik. “CR-V was their best-selling vehicle in April, it's been their highest revenue product this year, and likely drives more total profit to American Honda's bottom-line than any other model."
Santa Monica-based TrueCar gives consumers transparent insight into what other car shoppers in their areas paid. TrueCar claims a network of more than 10,000 Certified Dealers who are “committed to providing upfront pricing information and a hassle-free buying experience.”