April 2013 Kontos Kommentary
Current Used Vehicle Market Conditions and Outlook
As in March, wholesale used vehicle prices rose seasonally but fell annually in April, indicating continuation of a softening overall pricing environment. Retail sales of used vehicles in April were down on a year-over-year basis for the first time in 2013, although dealers still saw month-over-month used vehicle sales growth and year-over-year growth in CPO sales.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in April averaged $10,096 – up 0.7% compared to March but down 4.5% relative to April 2012.
The largest monthly increases in prices were concentrated in the SUV classes, corresponding to strong new vehicle sales of SUVs in April. Consumer interest in these vehicles has been aided by more favorable gas prices and better fuel economy in newer SUV models. At the same time, compact cars also showed strong month-over-month increases.
Prices for used vehicles remarketed by manufacturers were up 1.0% month-over-month, but down 3.0% year-over-year. Prices for fleet/lease consignors were up 1.6% sequentially, but down 2.3% annually. Dealer consignors saw a 2.2% average price increase versus March 2013, but a 6.4% downturn versus April 2012. Thus, all three major seller groups experienced the same seasonal uptick but annual downturn seen for prices in the market as a whole.
Based on data from CNW Marketing/Research, retail used vehicle sales were down 1.4% year-over-year for franchised dealers and 0.2% for independent dealers, although both dealer types saw significant (more than 24%) month-over-month increases. April sales of certified pre-owned (CPO) vehicles came off their all-time high in March, and were down 7.2% month-over-month but were up 23.2% year-over-year based on figures from Autodata.
1 The analysis is based on nearly six million annual sales transactions from over 150 of the largest U.S. wholesale auto auctions, including those of ADESA as well as other auction companies. ADESA Analytical Services segregates these transactions to study trends by vehicle model class.
The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to KAR Auction Services, Inc. The views and analysis are not the views of KAR Auction Services, its management or its subsidiaries; and their accuracy is not warranted. The statements contained in this report and statements that the company may make orally in connection with this report that are not historical facts are forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “bode”, “promises”, “likely to” and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any obligation to update any forward-looking statements.Wholesale Price Data by Model Class Segment - April 2013
Wholesale Price Data by Model Class Segment - Full History 2011 - 042013
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012
ADESA Canada Used Vehicle Price Index
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