GAINSEVILLE, GA - Even though the New Year holiday eliminated or moved some auctions to a different day and/or time this past week, most had low consignment and conversion percentages that were lower than the previous few weeks. According to Ricky Beggs, VP and managing editor for Black Book, "It was interesting that the auctions this week definitely had stronger actual dealer presence on the lanes."
The final new car sales numbers for 2012 have been reported and December met most expectations with an impressive 9-percent increase compared to December 2011. Even stronger was the total year-over-year increase of 13 percent, to finish at 14.49 million according to reports within Automotive News.
"Maybe the interest and level of new sales was the major driver holding back the used wholesale activity of the most recent week. More new sales equals more trade-ins which equals less additional sourcing for used inventory," Beggs commented.
Another area of the used market in the news since the beginning of 2013 related to the purchase of Zipcar by Avis Rental car. This immediately added 11,000 additional in service units to the Avis portfolio, while creating even larger growth and revenue opportunities for Avis. A nice mix for them, and yet, Black Book feels there will be no adverse effects on retention values for Avis remarketing or the overall used market.
"Let’s get back to the actual market changes for the week. Even though the consignment was reduced, the need for adjustments was still pretty strong, with an average of just over 2110 vehicle changes each day throughout the past week," according to Beggs. "One significant difference was the number of adjustments that were increases. With the previous six weeks of 31 percent, up to 50 percent of the adjustments being increases, the 25-percent level this past week is more in line with the levels seen from last October to the early part of November prior to the market being driven up due to the demand for cars in the northeast portion of the country."
With fewer increases, only two of the 24 segments showed positive changes overall, the Full-size cargo and passenger vans at +$17 and +$14 respectively. These two have shown strength now for the past 4 weeks.
"With a 15-percent normal annual depreciation broken down to a 1.25-percent per month decline and a 0.3-percent weekly level, only three truck segments, the Compact Pickups, the Mid-size Pickups and the Cargo Minivans, and two car segments, the Upper Mid-size Cars and the Premium Luxury Cars, resulted in softer markets or larger than normal percent changes this past week," Beggs noted.
One year ago, the overall market was very similar in both percent and dollar change. The cars this past week at -$40 and -0.27 percent was just slightly weaker that the first week of January 2012, which reported in at -$33 and -0.23 percent.
The trucks year to year change was even more similar than the cars. The most recent weekly results of -$23 and -0.17 percent was almost identical to a year ago at -$21 and -0.16 percent.
"I must say, these are pretty solid retention levels. Moving forward, let’s see if the strong new car sales of November and December 2012 and the overall annual sales of 14.49 million continues to hold back the used wholesale market," Beggs said.
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