January 2014 Kontos Kommentary
Current Used Vehicle Market Conditions and Outlook
The softening wholesale price pattern continued in January, albeit at a mild rate relative to year-ago levels. Wholesale volume growth, especially from off-lease vehicles, continues to put downward pressure on prices, and weather conditions restricted retail demand from offsetting this impact. Still, January prices did exhibit their typical seasonal uptick relative to December.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in January averaged $9,983, -- up 3.4% compared to December, but down 0.5% relative to January 2013. About as many model class segments had year-over-year gains as those that had losses, and this led to the relatively mild overall decline. Among the gainers were SUVs, fullsize pickups and vans, with most car and crossover segments registering year-over-year price declines.
Prices for used vehicles remarketed by manufacturers were down 2.0% month-over-month but up 4.0% year-over-year. Prices for fleet/lease consignors were up 3.8% sequentially and 0.3% annually. Dealer consignors saw a 1.7% average price increase versus December 2013, but a 2.5% downturn versus January 2013.
Based on data from CNW Marketing/Research, retail used vehicle sales were down 31.7% month-over-month, as severe weather negatively impacted auto shopping. Sales of certified pre-owned (CPO) vehicles in January were down 2.9% from the prior month but up 10.5% from the prior year, based on figures from Autodata.
1 The analysis is based on over 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 - January 2014
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ADESA Analytical Services Selected Model Class Segments
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