Webb: Pricing Stability Coming from OEMs and Dealers, Kontos: Prices Up Substantially from Year Ago March 12, 2015

Wholesale Prices Down but Stable as Volume Increases

Tom Webb
Chief Economist
Manheim Consulting

While wholesale prices did see their first drop after four previous months of increase, they did remain stable overall. The February Manheim Used Vehicle Value Index to a level of 125.1, which represented an increase of 1.5% from a year ago. The number of vehicles entering wholesale channels grew significantly in February. Prices remained above the trend due to automaker pricing discipline on the new vehicle side, and effective vehicle management prices by dealers on the used vehicle side.

Here’s the Manheim Used Vehicle Value Index on the February market

Disappointment in New Vehicle Sales Did Not Bring Aggressive Promotions:
Some manufacturers have decided to slow production rather than force the market.

Most Dealers Reported Good Operating Results in Used Vehicle Departments:
Lease returns and newer trade-ins providing wider mix and dealers have been optimizing inventory to make most of it.

Compact Cars Weakest Segment of Wholesale Pricing in Recent Months:
That’s not surprising given slow sales and high days’ supply on the new vehicle side.

Richer Mix of Off-Rental Units Helps Keep Price Stability in February

Tom Kontos
Executive Vice President & Chief Economist
ADESA Analytical Services

Average wholesale used vehicle prices fell modestly in February compared to January, but remain up on a year-over-year basis, primarily due to a “richer mix” that includes a higher proportion and quantity of off-rental program/factory units. Wholesale used vehicle prices in February averaged $10,176 – down 0.3% compared to January but up 3.4% over February 2014, according ADESA Analytical Services’ Wholesale Used Vehicle Prices by Vehicle Model Class. Fullsize Pickups continued to show pricing strength, while crossovers saw year-over-year declines.

Kontos Kommentary on February market trends

Prices for Used Vehicles Remarketed by Manufacturers Up 4.4% from January:
But used vehicles remarketed by automakers were down 8.8% year-over-year.

Prices for Fleet/Lease Consignors Down 1.0% Sequentially but up 0.7% Annually:
Dealer consignors saw 1% decrease from January, but 3.5% increase relative to February 2014.

Retail Used Vehicle Sales for February are Unavailable from CNW Research:
Certified Pre-Owned sales were again strong, rising 10.3% year-over-year.
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