GAINESVILLE, GA - Recent events have sent the remarketing industry into a bit of a headspin, with Hurricane Sandy and the loss of remarketing leader Matt Marks.
Scroll down to watch the Beggs on the Market video, instead.
"A week ago this past Sunday, a real influencer and leader within the remarketing industry, the Executive Director of the International Automotive Remarketers Alliance, Matt Marks, passed away," Ricky Beggs, VP and managing editor for Black Book said. "What a great leader and man of integrity this industry has lost. Our thoughts and prayers go out to his family."
Beggs continued, "Then, last Monday, Hurricane Sandy headed inland and left a tremendous path of destruction over most of the east coast. When we look at the physical damage, the future effects on the automotive industry is a very small piece of the recovery and is bound to take an extended period of time. But foremost is our concern for the citizens and companies of the hard hit areas. If you are more fortunate than those personally affected by Sandy, any donation to the American Red Cross or any relief agency will be greatly appreciated."
During the past week, Black Book has had almost 20 media requests looking at the effects of Sandy on new and used sales, disposing of the many flooded and other damaged cars, price movements, the impact on auto lenders and even wondering what segments of vehicles will feel the most impact.
"The initial effect was the sudden loss of existing new and used sales which greatly altered the October new car sales totals and prohibited the SAAR from reaching September’s 14.9 million level," Beggs noted. "With the number of flooded cars expected to greatly exceed the 640,000 cars destroyed during Katrina’s destruction in 2005, the November number will depend upon available new car inventories getting built back up to at least pre-Sandy levels."
On the used side of the market, the current slightly soft seasonal declining market levels should come to a halt and probably get a positive bump in values, according to the "Beggs on the Market Report."
"It should take a few weeks to see this and the reach out from the physically damaged areas could go to over half of the geographical country. With online auction listings, finding needed inventory is surely possible even in this existing level of tight used supplies. We will be on the lanes and analyzing loads of data feeds to report if and when any trend appears," Beggs said.
Click here to see how Black Book supported the industry in telling Fox News how the industry is driven to monitor and eliminate the bad vehicles from staying in the market.
"Another question Black Book was asked quite often this past week related to what vehicles or segments will feel the most impact in demand, and wholesale price. Even though the 14 truck segments overall average change this past week was larger than the cars for the first time over the past 14 weeks, we don’t expect that to be the case within the next month," Beggs said. "More specifically, the market demand for Full-size Pickups (FPT) and Full-size Cargo Vans (FVC) should exceed the remainder of the market due to existing market volumes of these type vehicles and the need within the construction and service industries with rebuilding the many damaged and totally destroyed homes and businesses."
Another market Beggs expects to show an uptick in demand and used wholesale values will be the luxury type units, both cars and utility models. With leases being so high a penetration of total new sales in the area directly hit the hardest, these luxury manufacturers also represent higher overall lease penetration.
"As I have already mentioned, it will take at least a week or so before any refilling of the damaged inventories will occur. The actual results from this past week show the current fall seasonal decline, combined with the traditional end of the month less aggressive bidding on the lanes," Beggs said.
Cars fared better than the trucks and also compared to the change level of the previous four weeks, this past week at -$65. 8 of the 10 car segments had a better (lower) decline than the total car segment average decline. Only the Prestige Sporty Cars (PSC) at -$151 and the Entry Sporty Cars (ESC) at -$76 had larger declining levels. The truck market softened even more this past week with the overall segment average change at -$73, twenty dollars larger than the previous week and the largest change since the last week of this past July.
Watch the recent video here: