October 2013 Kontos Kommentary
Current Used Vehicle Market Conditions and Outlook
October average wholesale prices partially reversed declines seen in previous months, registering an increase versus September. Prices remained down on a year-over-year basis, but even this decline masks underlying strength, in that this October’s results are being measured against tough comparables from last October’s temporary price strength stemming from Superstorm Sandy.Nevertheless, some of October’s increase in average prices is the result of proportionately more high-priced program units remarketed by manufacturers and therefore shouldn’t be overplayed. The overriding dynamic will remain that wholesale used vehicle prices continue to receive downward pressure from returning supplies of off-lease units and other sources of used car volume growth resulting from stronger new vehicle sales.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in October averaged $9,590, – up 1.2% compared to September, but down 1.8% relative to October 2012. The month-over-month uptick runs contrary to typical seasonal declines seen in October relative to September and is remarkable in the face of growing used vehicle supplies. Trucks seemed to benefit in particular from this respite in price softening.
Still, prices for used vehicles remarketed by manufacturers were down 5.3% month-over-month, although up 2.1% year-over-year. Prices for fleet/lease consignors were also down 2.7% sequentially but up 1.5% annually. Dealer consignors actually saw a 1.0% average price increase versus September 2013, but a 3.3% downturn versus October 2012.
Based on data from CNW Marketing/Research, retail used vehicle sales were down 10.8% month-over-month but up 1.6% on a year-over year basis in October. Sales of certified pre-owned (CPO) vehicles were up 13.1% from the prior month and 20.6% from the prior year, based on figures from Autodata.
1 The analysis is based on nearly 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 - October 2013
Wholesale Price Data by Model Class Segment - Full History 2011 - 102013
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012
ADESA Canada Used Vehicle Price Index
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