11 Apr, 2011, 10:00 ET
SANTA BARBARA, Calif., April 11, 2011 /PRNewswire/ -- The recent Japan disaster could result in a nearly 10 percent jump in new vehicle pricing for some key models, among other effects to the automotive industry, according to a just-released report by ALG, a subsidiary of DealerTrack Holdings, Inc. (Nasdaq: TRAK) and the industry benchmark for residual values and depreciation data.
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With the disaster causing suspensions in operations for a majority of Japanese vehicle production facilities, dramatic disruptions to supply chains and damage to manufacturers' fully-assembled vehicle inventory in the region, the ALG report analyzes the impact on new vehicle transaction prices, current new and future used vehicle supply, and residual values. The ALG analysis reveals that while a short 20-day interruption may have little or no impact, longer interruptions equating up to 100 days of vehicle production could cause an eight-to-nine percent increase in vehicle pricing on some models and a 0.2 to 0.7 percent increase in 36-month residual values as a result of changes in future used supply.
"With the eyes of the world focused on recovery efforts in Japan, ALG is carefully measuring the impact this disaster may have on future residual values and current market pricing," said Eric Lyman, director, Residual Value Solutions, ALG. "Based on current available data and OEM plans, we believe there will be minimal long term impact, and a short term spike in new car pricing on some models manufactured or sourced from Japan. However, further complications and supply shortages could have a slight positive impact on residual values," added Lyman.
In a recently released report that focuses on a handful of key affected models, ALG predicts that a 20-day production delay will cause new transaction prices to rise by approximately 1.5 percent on average, except for the Honda Accord. The impact to the Accord is mitigated by the fact that a large share of its production occurs in the U.S. If Japanese manufacturing interruptions caused by plant shutdowns, supply chain shortages and energy supply issues equate to roughly 100 days of production disruption, ALG forecasts a 0.7 percent increase in 36-month residuals for the entire Entry Compact segment. This is mainly driven by a reduction in supply of vehicles currently only produced in Japan; for example, the Honda Fit and the Toyota Yaris.
For the complete ALG Japan Crisis Report, visit: http://www.alg.com/pdf/whitepaper_japan_crisis.pdf
About ALG (www.alg.com)
Based in Santa Barbara, California, ALG is a leading provider of data and consulting services to the automotive industry. ALG publishes the "Automotive Lease Guide" – the standard for residual value projections in North America, and has been forecasting automotive residual values for over 45 years in both the U.S. and Canadian markets. ALG is a company of DealerTrack Holdings, Inc. (Nasdaq: TRAK).
About DealerTrack (www.dealertrack.com/)
DealerTrack's intuitive and high-value software solutions and services enhance efficiency and profitability for all major segments of the retail automotive industry, including dealers, lenders, OEMs, agents and aftermarket providers. The Company, whose solution set for dealers is the industry's most comprehensive, operates the largest online credit application network in the United States, connecting approximately 17,000 dealers with more than 1,000 lenders. DealerTrack's Dealer Management System (DMS) provides dealers with easy-to-use tools and real-time data access to enhance their efficiency, while DealerTrack AAX delivers the inventory management tools and services needed to accelerate used-vehicle turn rate and help increase profits for dealers. The Company's Sales and F&I solutions allow dealers to streamline the entire sales process as they structure deals from a single integrated platform, while also giving dealerships the ability to leverage vehicle registration and titling services through DealerTrack. Its Compliance Solution helps dealers meet legal and regulatory requirements and protect their assets. For lenders, DealerTrack's Processing Solutions offers services including titling, collateral management, and digital document services. DealerTrack's family of companies also includes data and consulting service providers ALG and Chrome Systems. For more information, visit www.dealertrack.com.
Safe Harbor for Forward-Looking and Cautionary Statements
Statements in this press release regarding the effects of the recent disaster in Japan on the automotive industry and ALG forecasts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of DealerTrack to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.
Factors that might cause such a difference include the extent of the impact of the recent disaster on the automotive industry and other risks listed in our reports filed with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2010. These filings can be found on DealerTrack's website at www.dealertrack.com and the SEC's website at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and DealerTrack disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.
SOURCE DealerTrack Holdings, Inc.
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