Along with offering his thoughts on what this year might hold, Black Book’s Ricky Beggs didn’t use the term “normal” to describe the closing of 2012.
In his first online video analysis of 2013, Beggs told dealers that “throughout these party-filled holidays and a couple of slightly shortened work weeks, I must tell you that from our auction attendance at both physical and online auctions, the facts presented by the data we have recently received and the comments from the dealers we have talked with recently, the market would not be described as normal in relation to the December activity of the past few years."
In continuing his commentary contained in the latest episode of “Beggs on the Used Car Market,” the managing editor highlighted trends that’s been going for the past six weeks.
“The percentage of adjustments requiring raises to the most recent published values has been at levels we have only seen after the calendar has turned to the first quarter of a fresh year,” Beggs said. “The initial push of strength we believe was a result of additional vehicles needed to replace many of those damaged during Hurricane Sandy.
“The most recent strength has to be the overall pent-up demand bringing forward an early spring market,” he continued. “Consumers have put off buying their next new or used car as long as they can or at least want to. Their current car is old and consumers want to move forward now that the election issues are behind us with only the fiscal cliff still hanging over our heads.”
During the past six weeks, Black Book found the increases amounted from a low of 31 percent of the adjustments to a solid 50 percent this past week for a 39-percent average during this period.
Looking next at specific vehicle segments, editors found that the average truck segment price change produced a $5 gain, fueled by the strength of full-size vans. Among the units, passenger versions moved up $74 while cargo models jumped by $56.
While not to the vans’ level, Black Book discovered several other truck segments posted price climbs last week, including full-size pickups (up $5), compact pickups (up $3) and compact crossovers (up $3).
Meanwhile on the car-segment side, overall prices slid $37, the smallest average decline during the past five weeks and the second smallest decline since the week ending June 15.
Even with the national average gas prices at the pump at $3.26, only 1 cent above the low point of the last year, editors noticed the three smallest cars in physical size that offer the most fuel efficiency also boast the most stable values within the car segments. Black Book found entry level cars softened by just $1 while compact cars (down $5) and entry midsize cars (down $6) didn’t drop by much.
“The better equipped entry type cars are helping make these segments more enticing as consumers are not having to give up all the creature comforts with today’s smaller vehicles,” Beggs said.
Beggs wrapped up his latest analysis by looking ahead.
“If history is an indicator, the market should continue to show stability and maybe even a little strength,” he said. “The past four weeks during December with positive changes averaging 40 percent, almost one year ago during January 2012, the four-week positive changes averaged 48 percent.”
View the original article here
A new year has begun, and predictions for a prosperous year for the country's new- and used-car markets are pouring in. Factors such as increases in available trade-ins and high demand are expected to boost used sales, while numerous redesigns may ramp up the new market.
According to a study released from Indian firm Ken Research titled, “The US Used Car Market Outlook 2016 - Driven by Late Model Used Cars,” the nation’s used-car market revenue is expected to reach close to $480 billion by 2016.
Providing some background to these numbers, officials pointed out that in 2006, as the economy began to slow down, used market revenue came in at $340 billion and grew less than 1 percent during 2006–2011.
What is pushing this expected boost?
The report cited the “high average prices of used cars” as the main factor behind this growth.
“Average prices of used cars, price of gasoline and diesel, improvement in the access to F&I services, increased sales of new cars which will ensure the availability of late-model used cars, consumer confidence will drive the U.S. used-car market in the future,” the firm’s research analysts further explained.
The company also predicted that hybrid used vehicles will continue to gain market share.
And with new light vehicle registrations in the U.S. in 2013 expected to rise 6.6 percent over 2012 levels to 15.3 million vehicles, according to Polk, a boost in trade-in rates may bode well for the used market, as well.
“Used-car sales and new-car sales are complementary in nature, if the prices of one incline the other kind will also follow suit. Sales of new cars will determine the size of future used car inventory,” Ken Research shared.
Breaking down Polk’s analysis in greater detail, the company also expects production rates to jump, increasing to the 15.9 million unit range (an anticipated 2.4 percent increase from 2012), driven by an improving economy and capacity expansion in the region.
In fact, consumers and dealers in the U.S. may be on board for an exciting year in the automotive world. According to Polk, new-vehicle introductions in 2013 will increase significantly, with 43 new vehicle introductions in the U.S. planned for the year, up nearly 50 percent over 2012 levels.
Moreover, over 60 vehicle redesigns are expected to hit the lots in 2013, according to Polk.
“Polk expects continued recovery in the industry in 2013 and 2014, a positive sign for the U.S. economy,” said Anthony Pratt, director of forecasting for the Americas at Polk.
“The auto sector is likely to continue to be one of the key sectors that lead the U.S. economic recovery, however, we don't expect to realize pre-recession levels in the 17 million vehicles range for many years. However, our baseline forecast hinges on Washington's ability to draft a budget plan that will avoid $600 billion in spending cuts and tax increases,” he continued, noting decisions in Washington may play a key role in how the automotive industry continued recovery pans out.
Polk also is predicting that the U.S. automotive market will return to pre-recession production rates by 2016. The company shared it expects a return to 16 million units in the U.S. by 2015 at the latest, a rate last achieved in 2007.
View the original article here
