TrueCar Projects Compact Utilities To Become Top-Selling U.S. Vehicle Segment In 2015

SANTA MONICA, Calif., May 4, 2015 /PRNewswire/ -- TrueCar, Inc. (NASDAQ: TRUE), the negotiation-free car buying and selling mobile marketplace, expects demand for compact utility vehicles to continue expanding among U.S. auto buyers this year, so much so that the segment will be the market's biggest for the first time.

In the first quarter of 2015, market share for compact utilities, led by Honda's top-selling CR-V, the Ford Escape, Chevrolet Equinox and Toyota's RAV4, grew to 15.6 percent to overtake compact cars at 15.1 percent and midsize cars at 14.7 percent. For the full year, TrueCar estimates the segment will account for 15.9 percent of total new light vehicle sales, while compact cars will hold 15.1 percent share. Compact utilities have seen a 12.4 percentage point gain in market share since 2000, when they represented just 3.2 percent of automotive deliveries.

"Car-buyers' shift in preference to utilities from sedans is a clear secular trend we see in TrueCar demand data, transaction price data and sales results," said John Krafcik, president of TrueCar. "Given how well compact utilities meet consumer functionality and fuel-economy needs, smart automakers have leaned into the segment and benefitted from significantly higher revenue and margins."

As fuel prices have declined and more segment capacity has been added, TrueCar finds that compact utilities are the only segment to have experienced double-digit discount growth (as a percent off MSRP) in the past 12 months on a year-over-year basis. There is also 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 illustrates the significant contribution compact utilities have on automakers' total revenue. CR-V was the brand's top revenue source in the first quarter, surpassing the Civic and Accord car models. CR-V generated $2.0 billion, or 26 percent of Honda's $7.7 billion first-quarter revenue, dwarfing Civic's $1.3 billion contribution. Accord revenue was $1.8 billion or 23.5 percent of total Honda division revenue. While Accord was Honda's first-quarter volume leader, followed by CR-V and Civic, CR-V's average transaction price of $27,239 outperformed the Accord at $25,422 and the Civic at $20,078.

"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."

About TrueCar
TrueCar, Inc. (NASDAQ: TRUE), the negotiation-free car buying and selling mobile marketplace, gives consumers transparent insight into what others paid and access to guaranteed savings off MSRP from TrueCar Certified Dealers. TrueCar's network of more than 10,000 trusted Certified Dealers is committed to providing upfront pricing information and a hassle-free buying experience. TrueCar powers car-buying programs for some of the largest U.S. membership and service organizations, including AARP, American Express, AAA and USAA. Not all program features are available in all states. TrueCar is headquartered in Santa Monica, California, with offices in San Francisco and Austin, Texas. For more information, go to www.truecar.com. Follow us on Facebook or Twitter.

TrueCar media line: +1-844-469-8442 (US toll-free) | Email: [email protected]

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SOURCE TrueCar, Inc.

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