Manheim's 19th Annual Used Car Market Report Examines All Facets of an Industry in Transition
NEW ORLEANS--Jan. 25, 2014: With labor market and credit conditions continuing to improve and expected to maintain an upward trajectory in the year ahead, the environment is ripe for sustained vitality in the new, used and wholesale marketplaces.
These and other trends are explored in detail in Manheim's 19th annual Used Car Market Report, unveiled today by Manheim chief economist Tom Webb at the National Automobile Dealers Association convention.
Looking ahead, Webb said 2014 will reveal "the next evolution of the wholesale marketplace," as declining margins, increasing wholesale volumes and rising market pressures will require new tools and strategies. For auction participants, this means the ongoing adoption of technologies that allow them to buy and sell vehicles through online platforms that provide simultaneous, multi-platform buying and selling opportunities.
In an introductory letter in the report, Manheim President Sandy Schwartz said the transformation of the remarketing industry is something the company embraces, pointing to the innovative new services offered by the company to facilitate the buying and selling process. "In the face of these changes, our goal at Manheim is to provide a trusted marketplace for buyers and sellers, enabling wholesale participants to appraise, finance, buy, sell, manage and transport inventory in the most efficient ways possible."
The 42-page report, co-written by Manheim Consulting Director Scott Hatmaker, examines data and trends in all sectors of the used car marketplace, including chapters on dealers, rental, leasing, repossessions, fleets, international wholesaling and salvage auctions.
Among the highlights:
New vehicle sales increased for the fourth consecutive year, and franchised dealers sold a record number of certified pre-owned vehicles. Increased financing availability balanced out inventory acquisition challenges for independent dealers.
New vehicle sales into rental were their highest since 2007. Low fleet depreciation and inventory funding costs led to another record year despite a 1% decline in revenue per vehicle.
New lease originations were up to 3.2 million, highest since 2000. Increasing off-lease volumes in the years ahead will pose challenges for remarketers and opportunities for dealers.
Repo volumes increased 5%, totaling an estimated 1.37 million vehicles.
Commercial and government fleet vehicle purchases increased for the fourth straight year. New vehicle sales into fleets are expected to level off near 900,000 by 2015.
Wholesale volumes and prices increased in the U.K., while at the retail level both new and used vehicle prices improved. Emerging markets such as China and India will experience rapidly increasing used car sales in the years ahead.
Prices and volumes increased modestly at salvage auctions in 2013. An increasing number of dealers are purchasing and repairing salvage-titled vehicles to sell to retail buyers.