ATLANTA, April 7, 2017 /PRNewswire/ -- Stability continues heading into the second quarter. While wholesale used vehicle prices declined by 0.5 percent in March, the Manheim Used Vehicle Value Index – a measure of wholesale prices adjusted for mix, mileage and season – came to a reading of 124.1. This is an increase of 1.3 percent from a year ago.
"While used vehicle values have declined in five of the last six months, it has not been the collapse that many analysts have warned for more than a year due to increasing wholesale supplies," said Tom Webb, chief economist for Cox Automotive. "On the contrary, the used vehicle market remains healthy while any weakness we've witnessed is overall due to an excessive new vehicle inventory – not used."
Pointing to the continued stability of the market regarding used vehicle retail sales, total used retail sales in January and February – including private party transactions – were up 5 percent. Growing on this strength, franchised dealer sales were up 6 percent and independent sales were up 7 percent according to the National Automobile Dealers Association (NADA). Additionally, the credit and lending environment remains favorable.
Despite the continued overall stability, the new vehicle environment continues to pressure used vehicle values, and franchise dealers started both February and March with more than four million new units in stock. A variety of major incentives were applied to that inventory in February and the industry achieved a seasonally adjusted annual selling rate (SAAR) of 17.5 million. Available incentives were just as large in March, but sales slowed and resulted in a SAAR of 16.5 million – the lowest in just over two years.
For used vehicle pricing trends, all car segments – except for truck segments – were down from a year ago. First quarter wholesale pricing for all vehicle segments included:
A straight average of auction pricing for rental risk units in March was up 3.5 percent from a year ago, reflecting a better mix of market classes and lower mileage. Representing a 10 percent decrease from this time last year, average mileage came in at 33,600 for rental risk units. SUVs and CUVs accounted for 33 percent of rental risk sales in March versus only 25 percent last year. The share accounted for compact cars fell from 29 percent to 25 percent.
"Even when compared to last year's high level, rental risk volumes sold at auction in the first quarter were up considerably," said Webb. "This year's off-rental volume was primarily due to fleet rationalization unlike last year's high number of new units entering the fleet and, as such, off-rental auction volumes may weaken later in the year."
Visit Manheim's website to access a variety of company publications, including monthly Auto Industry Briefs, white papers and blog entries by Tom Webb.
About Manheim (www.manheim.com)
Manheim® is North America's leading provider of vehicle remarketing services, connecting buyers and sellers to the largest wholesale used vehicle marketplace and most extensive auction network. Through 127 traditional and mobile auction sites and a robust digital marketplace, the company helps dealer and commercial clients achieve business results by providing innovative end-to-end inventory solutions. Approximately 18,000 employees enable Manheim to register about 8 million used vehicles per year, facilitate transactions representing nearly $57 billion in value and generate annual revenues of more than $2.6 billion. Headquartered in Atlanta, Manheim North America is a Cox Automotive™ brand. For more information, visit http://press.manheim.com.
About Cox Automotive
Cox Automotive Inc. is transforming the way the world buys, sells and owns cars with industry-leading digital marketing, software, financial, wholesale and e-commerce solutions for consumers, dealers, manufacturers and the overall automotive ecosystem worldwide. Committed to open choice and dedicated to strong partnerships, the Cox Automotive family includes Autotrader®, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, vAuto®, Xtime® and a host of other brands. The global company has 33,000 team members in more than 200 locations and is partner to more than 40,000 auto dealers, as well as most major automobile manufacturers, while engaging U.S. consumer car buyers with the most recognized media brands in the industry. Cox Automotive is a subsidiary of Cox Enterprises Inc., an Atlanta-based company with revenues of $18 billion and approximately 60,000 employees. Cox Enterprises' other major operating subsidiaries include Cox Communications and Cox Media Group. For more information about Cox Automotive, visit www.coxautoinc.com.
SOURCE Manheim