CARMEL, IN – A slowing economy and weak retail demand combined late last year to cause a year-over-year decline in wholesale vehicle prices in the last two months of 2006, according to the latest issue of Pulse, released by ADESA Analytical Services. The report, which provides a periodic review of economic indicators in the vehicle-remarketing industry, also notes that employee discounts widely available in 2005 also impacted the current vehicle marketplace in several ways.
According to Tom Kontos, vice president of ADESA Analytical Services, “The big story of 2006 in my mind is the weakness of retail used-vehicle sales, which were the lowest we’ve seen in the new millennium. Some of this is due to the maturation of the economic expansion, which is now more than five years old. However, it’s also important to note that broad employee discounting in 2005 may have brought forward used-vehicle sales that otherwise would have occurred in 2006.
“Regardless of the cause,” said Kontos, “the loss of more than 2.6 million units of retail used-vehicle sales in 2006 dampened demand and led to gradually declining wholesale prices. I expect this softness to continue into 2007 unless and until used vehicle sales are triggered by greater dealer discounting, ample tax refunds and more solid economic growth.”Other key findings detailed in Pulse include:
ADESA Analytical Services publishes the annual report, Global Vehicle Remarketing and the periodic Pulse report. The latest edition of Pulse contains 60 pages of almost 50 graphs on everything from GDP to SUVs. The publications cover the $82 billion vehicle-remarketing industry and the $375 billion used-vehicle market in the U.S. and Canada.