As a sign of continuing overall long-term stability in the market, used unit retail sales were up 4.7 percent from a year ago for the first eight months of 2016, and recent dealer surveys suggest a modest uptick for September. Additionally, despite CPO sales slipping 1.4 percent in September, they are up 3.7 percent year-to-date. Furthermore, the seasonally adjusted annual rate (SAAR) for new vehicles sales was a better-than-expected 17.7 million in September.
Within the pricing trends by market class, all major car segments had year-over-year price declines in September while sports cars experienced a significant increase in pricing. All major truck segments experienced an uptick in pricing while the small entry units in the SUV/CUV segment were weak with a decrease of 4.4 percent. However, full-size units were up a strong 6.5 percent – thanks in part to stable gas prices.
Third quarter wholesale pricing for all vehicle segments included:
- Compact Car prices again represented the biggest pricing decrease of all car classes, which was down 2.6 percent in September over the same period last year, but has experienced some reprieve given pricing has gone as low as it can for this class.
- Midsize Cars again remained one of the weaker segments and showed a modest decrease of 0.7 percent compared with other car classes over the same time period last year.
- SUVs and CUVs increased 1.8 percent from last September thanks in part to a favorable lending environment and overall solid credit conditions.
- Pick-ups and Vans – Representing the most significant increase of all car classes, pick-ups had an increase of 5.8 percent, with vans showing a more modest – yet still strong – 5 percent uptick.
- Luxury Car wholesale pricing – in a somewhat uncommon occurrence – remained unchanged from last year at this time. Despite this, the luxury car class remains solid – especially when comparing with the Midsize, Small Entry SUV and Compact segments.
For rental risk units, the average price sold at auction in September reached a record high of just over $17,000. This record price was driven by lower mileage and a better mix of vehicles being sold in better condition. When rental risk pricing is adjusted for mileage and broad market class shifts, it was down 1 percent for the month and year-over-year.
At 37,500 miles, the average mileage of rental risk units sold at auctions was the lowest since November 2013 and Midsize cars represented a significantly smaller share of September sales while Crossovers accounted for a much higher share. In the third quarter of 2016, vehicles with a grade of 4.0 or higher accounted for 42 percent of all rental risk sales vs. last year's third quarter when vehicles in the same condition accounted for only 34 percent of sales.
"Heading into the remainder of the year, the seasonal headwind to wholesale pricing has always been strongest during the Labor Day through Thanksgiving period," said Webb. "Additionally, statistics show that seasonal pressure on wholesale pricing in October has not diminished over the past 20 years despite new model introductions that are increasingly scattered throughout the calendar 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 North America
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 its 115 physical, digital and mobile auction sales, 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 7.5 million used vehicles per year, facilitate transactions representing nearly $50 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.
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