If the last three years drilled home one message about remarketing, it’s that you can’t keep up with economic shifts, vehicle values and supply chains, and market dynamics fast enough.
That’s why the Conference of Automotive Remarketing puts a priority on programming a thorough economic state of remarketing session early in the conference. This year, the session reviews how the economic and industry consequences of the last three years are defining the outlook for this decade. The session will be held Wednesday, March 29 at 1 p.m. at Caesars Palace Las Vegas.
Moderator Charlie Vogelheim will kick off the discussion with conference stalwarts Jonathan Smoke, chief economist for Cox Automotive, Dr. Alex Yurchenko, senior vice president and chief data science officer of Black Book and MOTOR, and Tom Kontos, chief economist for KAR Auction Services and Adesa. They will be joined by newcomer Dr. John Coles, senior director of data science and analytics at ACV, who is appearing for the first time as a speaker at CAR.
In a recent interview, Coles said he is responsible for developing machine learning models for real time prices on every car that ACV sells in its digital marketplace. He will explain the many mixed signals in the economy and the used and new vehicle segments that remarketers should expect this decade.
“We’ll be seeing the effects of the pandemic in pricing trends that will move up and down in the next few years,” he said. “With the supply challenges of 2020-23 in the marketplace, there are pockets of value variability due to the sustaining impacts from COVID.”
Yurchenko said he will be elaborating on the following points:
New sales are projected to grow this year with MSRP increasing and incentives staying relatively low. Although incentives are increasing from historic lows of 2022, they will remain well below pre-pandemic levels.
“Most of the growth in new sales will come from fleet sales as that part of the industry was on a strict diet in the last three years,” he said. “Used prices are going up now (and projected to be strong throughout Q2 but projected to decline in the second half of the year.”
Meanwhile, available used inventory will start to decrease later this year with fewer lease returns and a continuing shortage of rental returns, Yurchenko added.
Smoke said he plans to provide a macro-view of the economy and how it’s affecting the wholesale used vehicle market, fleet sales, vehicle sales and pricing, vehicle leasing, dealer consignment and rental fleets.
Since he last spoke at industry conferences, the economy and automotive market this year has started off stronger than expected. “But still have lingering issues. We’ve got this phenomenon that good news in the economy is bad news for the Federal Reserve to bring inflation down. While we no longer see as negative an outlook for 2023, we can’t eliminate the possibility of a recession later in the year that would impact 2024. There’s a worsening outlook for where interest rates will go.”
For fleet operations, the fact OEMs are devoting more sales share to fleets is the start of normalization, but that segment still has a long way to go toward normalcy given the backlog in orders from fleets, Smoke said. He doesn’t foresee any short-term changes in the wholesale vehicle market, which still remains tight despite moving slightly higher.
The Conference of Automotive Remarketing, held in partnership with the International Automotive Remarketers Alliance and the National Auto Auction Association, will take place March 28-30 at Caesars Palace Las Vegas, and includes a full agenda and exhibit hall spanning consignment, auction operations, industry economics and politics, auto transport, electric vehicles, digital technology, automotive recon, professional training, industry outlooks, and more.