Manheim’s November Index Rises After Five Months of Declines

Auto Remarketing | Manheim’s November Index Rises After Five Months of Declines

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December 8, 2011 | ATLANTA By Auto Remarketing Staff Tom Webb, Manheim

Dealers hoping wholesale prices would continue to soften as this year came to a close might be disappointed with the latest Manheim Used Vehicle Value Index.

After five consecutive monthly declines from its peak reading in May, November’s index reading rose 0.8 percent to 123.8. However, Manheim pointed out Wednesday that wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) are down 0.4 percent on a year-over-year basis.

“Prolonged pricing strength in the wholesale market has been the result of sustained improvements in retail vehicle markets (both new and used) and reduced wholesale supplies,” Manheim chief economist Tom Webb explained.

“With signs of improvement in the broader economic picture, retail vehicle markets will likely produce an even bigger appetite for available auction inventory,” Webb projected.

Dealers might remember the May level came in at 127.8 — the highest point it has ever been since Manheim started the index back in 1995.

As Manheim mentioned, November’s overall wholesale prices were 0.4 percent lower than a year earlier. The price decline by three segments proved to be more than the price increase by three other vehicle types.

Leading the November decliners were SUVs and CUVs, which Manheim said were down 4.6 percent. Luxury cars (down 1.3 percent) and pickups (down 0.3 percent) also ticked slightly lower year-over-year.

Manheim determined compact cars led the price surge, gaining 5.0 percent from last November. Midsize cars came in right behind with a 4.6-percent increase. Vans also posted a 1.2-percent increase last month, according to Manheim’s analysis.

“Over the periods of the past three months and of the past six months, pickups and minivans have been the strongest segments,” Webb surmised.

“Compact cars are up the most year-over-year, but have weakened in the back half of this year,” he continued.

“On a mileage- and seasonally adjusted basis, however, compact car prices showed an uptick in November,” Webb went on to say. “Data sources that look only at straight averages might not pick up on this fact since, in November, the average mileage of a compact car sold at auction reached a record high.”

Continued Strong Prices at Auction for Off-Rental Units

As was the case in October, Webb noted rental risk volumes rose significantly in November without any deteriorating impact on pricing, which held steady.

He added average miles on auction-sold vehicles also remained steady with previous months.

Commercial Fleet Prices Rebound

Manheim indicated pricing for end-of-service midsize fleet cars recovered in November after a fairly weak October.

Webb also noticed cargo vans and pickups also showed strong pricing.

“As is always the case in the commercial fleet segment, however, residual performance was very much make- and model-specific,” Webb emphasized.

“Some end-of-service models have a more than ample supply available in an overall market that is short of inventory,” he continued. “Naturally, the residual performance of those models suffered.”

Used-Vehicle Sales Discussion

As usual, Webb used his index commentary to touch on retail sales, first from the used-vehicle perspective.

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Cincinnati Independent Auction Moves into New Facility, Broadens Repo Sales

Auto Remarketing | Cincinnati Independent Auction Moves into New Facility, Broadens Repo Sales

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December 9, 2011 | CINCINNATI By Auto Remarketing Staff

A Cincinnati independent auction recently moved into expanded and updated facilities and revealed plans to ramp up its bimonthly repo sale.

OKI Auto Auction relocated to a 10-acre lot, once part of the former Jim Beam Distillery off Interstate 75 at 120 Citycentre Drive. OKI leased temporary space for more than a year at the Hamilton County Fairgrounds across the street, according to a report posted by Cincinnati.com.

The story indicated OKI spent more than $2 million on the site, which includes a three-lane auction building and paved parking for vehicles. Northside Bank & Trust and the U.S. Small Business Administration provided financing.

Started by company president Lee Schoenling in 2000, OKI is now jointly owned with retired dealer Tom Moser. It has grown from seven to 70 full- and part-time workers.

Along with bi-monthly dealer consignment, the new facility is helping OKI boost its repossessed unit offering, too.

Repo sales now will be held on the first and third Wednesdays of each month at 10 a.m., before dealer-only sales.

The Cincinnati.com report indicated OKI projects to have 15,000 units go down its lanes this year.

The original online story can be found here.

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Beggs: Dealer Parking Lots at Auctions Might Not be Telling Whole Story

Recent first-hand attendance gave Black Book a different perspective on what’s going on in the wholesale market and prompted managing editor Ricky Beggs to ask, “Does the dealer parking lot tell the whole story?”

Beggs used a portion of his weekly video report, “Beggs on the Used Car Market,” to provide an answer.

“This past week had our editors at quite a few auctions, tracking and reporting the market. This attendance included a variety of markets, from auto to RV and even multiple HD Truck auctions,” Beggs began.

“This physical attendance also gives us a chance to talk directly to the auction managers, the auctioneers and the dealers who might be buyers or sellers, and get the real insight into the whys behind the sales and the no-sales,” he continued.

“Pulling into the parking lots of the auctions, and it being hard to find an open spot anywhere close to the auction entrance, says there will be a crowd, but it doesn’t mean they will all be bidding aggressively,” Beggs surmised.

“On the other hand, one editor returned to the office from a recent auction and said he was initially worried that the auction would not be very good and the market values would be off. He was afraid it would almost be a wasted day for the sellers due to the almost empty dealer parking lot,” Beggs shared. “But once the auction started, it was apparent that the right dealers were present and their check books were wide open.”

Black Book editors mentioned an interesting result appeared this past week as there were almost 2,000 more average condition values adjusted, a figure higher than prices modified for clean condition units.

Of the average condition adjustments, Black Book indicated 39 percent of these adjustments were increases, while just 24 percent of clean condition adjustments resulted in a price increase.

“Over the last year there have been several weeks with a fairly large discrepancy in the number of clean versus average condition changes,” Beggs surmised.

“This was especially true from mid-August until the end of September where we changed as many as 1,800 more clean condition values than average,” he stressed.

“This past week was the first time where the average condition was the predominate adjustment,” Beggs added.

Black Book discovered cars improved slightly this past week and prices were pretty consistent across the segment types in the change amount.

Editors pointed out premium sporty cars made a strong week-over-week improvement, declining $58 this past week as compared to $116 during the prior week.

Before premium sporty cars made their price improvement, Black Book said the only car segment to decline more was prestige luxury cars, which were off $94 a week ago after dropping $91 a week earlier.

Looking at trucks, Black Book determined the average change for all segments improved for the past three weeks. This past week the decline came in at $27.

Compact pickup trucks posted the second consecutive week of having a positive change as the segment gained $6.

Only two segments declined more this past week than the prior week. Editors noted those segments were cargo and passenger versions of full-size vans.

“With all of the numbers we have just highlighted, the market values and the auction activity are pretty solid for the time of the year,” Beggs stressed.

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Volkswagen Group Eyes Sales Objective of 8 Million Units

Auto Remarketing | Volkswagen Group Eyes Sales Objective of 8 Million Units

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December 19, 2011 | WOLFSBURG, Germany By Auto Remarketing Staff Volkswagen Jetta

Volkswagen Group believes its goal of moving 8 million units worldwide for the first time is within reach since through November, the German automaker sold 7.51 million units.

The figure marks a 13.9-percent rise from last year’s sales total. VW indicated it moved 6.59 million units from January to November of 2010.

The OEM is confident of making its sales objective since last month’s total represented a 15.3-percent rise from the same month last year. The group sold 711,400 in November, up from 617,200 a year earlier.

“We are making very good progress. Our target to top an annual 8 million units for the first time is within reach. That is an important milestone for the group,” VW Group board member for sales Christian Klingler said.

“Despite the anticipated high delivery levels for this year, we are already preparing for a very challenging year in 2012. Risks on European markets, in particular, are increasing,” Klingler acknowledged.

Looking at its sales performance geographically, VW Group noted that its brands delivered 3.38 million sales in Europe through November. That figure is 11 percent higher than then the 3.04 million units the OEM sold on the continent through 11 months of 2010.

The automaker specifically noted growth in Western Europe except Germany, which the company does not include in this particular metric. VW Group enjoyed a 6.6-percent gain in sales through November in this region, seeing volume rise from 1.71 million units to 1.82 million.

Within its home country of Germany, VW Group pointed out its sales gains are even stronger. The company moved 11.7 percent more units through November than the same span last year — 0.95 million units to 1.06 million units.

Higher still, VW said its deliveries in Central and Eastern Europe are up year-over-year as well. To be exact, sales are 29.3 percent higher — 382,800 units to 494,800 units.

In North America, VW Group saw its sales shoot up 21.4 percent from 494,700 units to 600,700 vehicles. Of these totals, the U.S. sales constituted 398,800 units, a 22.5-percent climb from the 325,600 vehicles the OEM moved from January through November of last year.

In South America, the OEM indicated a 6.6-percent year-over-year uptick from 802,600 vehicles to 855,500 units

And in the Asia/Pacific region, VW Group highlighted an 18.3-percent spike from 2.02 million units to 2.39 million units. Fueling that rise in the first 11 months was a 15.5-percent sales rise in China where VW Group indicated it delivered 2.11 million units, up from 1.82 million.

Also, the company pointed out its deliveries to India soared a whopping 125.4 percent from 44,600 units to 100,600 units.

Positive Trends for All Group Brands

After breaking down its sales performance regionally, VW Group outlined how each of its brands has fared through the first 11 months of the year.

Officials said Volkswagen Passenger Cars delivered 4.69 million vehicles to customers worldwide from January to November. That sum is 12.4 percent higher year-over-year from 4.18 million units.

VW Passenger Cars gained the most traction in Central and Eastern Europe (up 47.5 percent from 132,800 units to 195,800 vehicles) followed by North America (up 22.5 percent from 366,200 units to 448,500 vehicles) and the Asia/Pacific region (up 14.4 percent from 1.57 million units to 1.80 million vehicles).

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