Kontos: Wholesale Prices Still Strong, ALG: Supply Softens Residual Values May 22, 2014
Tom Kontos 2014 photo


High Demand for Late-Model CPO-Eligible Units Keeps Prices High

Tom Kontos
Executive VP & Chief Economist
ADESA Analytical Services

Wholesale prices were quite strong in April – up 0.3% over March and 3.7% over April 2013. That came from scarcity of supply and high demand for late-model, CPO-eligible used vehicles; demand was particularly strong for off-rental program and risk units. Off-lease volume will continue to go up, which should correct the late-model supply-demand imbalance and bring prices into moderation.

Here’s the latest edition of Kontos Kommentary

Used Vehicle Prices Averaged $10,468 in the Wholesale Used Vehicle Prices by Vehicle Model Class:
Midsize and mini SUVs experienced the strongest month-over-month (MOM) and year-over-year (YOY) increases.

Used Vehicles Remarketed by Manufacturers Up 0.8% MOM and 8.1% YOY:
Diminished quantities of factory units have made prices strong in recent months.

Sales of Certified Pre-Owned Vehicles Were Down 6.5% from March:
March had reached an all-time high, and April was up 9.5% from year ago.
Share:
Lyman_Eric_ALG_100w


Supply Has Gone Up, Causing a Decline in Residual Values

Eric Lyman
VP, Editorial and Partner Development
ALG

Expected seasonal movement in residual values for this edition of ALG’s Industry Report is -1.3 percentage points (ppts). At the industry level, ALG’s supply forecast rose for this edition, causing a -0.2-ppt impact on residuals. Gasoline prices were down significantly; vehicles with weak fuel economy had increases of up to +0.4 ppts, while fuel efficient segments had declines of up to -0.4 ppts.

Here’s the latest edition of Industry Report

General Motors Has Been Doing Well During Dramatic Recalls:
So far there’s been no used market impact on Chevrolet Cruze, and even Cobalt seems to be escaping relatively unscathed.

Segment-level Supply Had a -0.2-ppt Impact on Residuals:
Supply changes varied by segment, ranging from -0.7 ppts for Fullsize Utility to 0 ppts for Microcar.

Unemployment Rate Has Stabilized at 6.7% Over Past 4 Months:
GDP is expected to rise by approximately 2.7% in 2014 and 3.0% in 2015.
Share:
Expert Video Recap
Video news that moves people and ideas
Beggs_Ricky_Black Book_ May 2014
We Can Now Call it a Trend

Num­bers from this past week have been sim­i­lar to recent years – the depre­ci­a­tion is nor­mal for this time of year.

Share:
Video News & Opinions
Video news that moves people and ideas
Sturm_Steve_AOL
Forty One New Models Coming

AOL Automotive’s Steve Sturm talks at the thin­kLA Auto­mo­tive Break­fast 2014 about fuel prices, new mod­els, hydro­gen cars, and the next gen­er­a­tion of vehicles.

Share:
If you find that you received this newsletter by mistake or wish to unsubscribe to this publication, please click here to unsubscribe from the mailing list.

ADVERTISE WITH US - Contact AIN Media Publisher Chuck Parker at cparker@automotivedigest.com or (310) 265-2225 to learn more.