Certified Sales Suffer September Drought

By Joe Overby, Staff Writer
October 08, 2008

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TORRANCE, Calif. — After closing the summer on a high note, certified sales in September sank to a depth not seen in almost three years.

Autodata Corp. indicated that even though year-to-date numbers have climbed 1.5 percent, this month's certified sales are down 8.8 percent compared with last September.

With only 124,530 units moved during the period, the CPO industry hasn't witnessed a month this soft since January 2006, according to Autodata.

That being said, several brands recorded significant gains and have implemented unique strategies to help finish the year strong in an otherwise troublesome economic environment.

Take Lexus, for instance, which reported its best September thus far.

To help boost certified showroom traffic, the brand began its Season to Change Event last month, offering financing as low as 3.9 percent for up to 60 months on certified models.

The sale lasts through the end of October, and officials hope its momentum can carry through the fourth quarter.

"This event is driving traffic into our dealerships, and we expect October to be another strong month for CPO sales," commented Matt Kaleba, national certified pre-owned manager for Lexus."The momentum we are gaining should continue in the fourth quarter and propel us to another record year for Lexus CPO sales."

Specifically, Lexus moved 4,670 certified vehicles during the month, an 8.6-percent spike from last September.

Year-to-date CPO numbers climbed 6.2 percent, as the brand sold 40,241 units thus far.

Meanwhile, at Nissan, the brand reported total CPO sales of 5,689 units for the month, which is up 17.9 percent from last September. Year-to-date sales are at 48,388 vehicles, roughly a 9-percent increase compared to the same period a year ago.

While the Nissan division showed a 2-percent hike in September sales from a year ago, Infiniti climbed 325 percent, the third straight month it has shown triple-digit yearly gains.

To help carry that momentum into the final quarter of the year, Infiniti introduced a special financing program on several of its certified models that runs through Jan. 5.

"For the Infiniti Division, we've announced an October-December 3.9-percent CPO APR program on the G35 Sedan, M35, M45, FX35 and FX45," commented Neal Zirkle, senior manager of CPO/used-vehicle sales for Nissan and Infiniti. "It's a three-month program to give retailers the confidence of strong retail support when they are making decisions on trade-ins, off lease turn ins and auction sales.

"In addition, our regional marketing group has newspaper advertising planned to promote the offers in major markets," he added.

Meanwhile, at General Motors, officials are looking to the comprehensive GM Certified Used Vehicles warranty program and special financing to help build momentum for the fourth quarter after a slow September.

Combined sales for all GM certified brands came in at 35,341 units, a 13-percent dip from last September. Yearly CPO sales are down 6 percent at 374,716 vehicles sold.

"Looking ahead, the new fully transferable, no-deductible 12-month/12,000-mile bumper-to-bumper warranty on all GM Certified Used Vehicles, which launched Sept. 13, along with attractive GMAC finance rates offered on select vehicles, will help drive consumer consideration and generate showroom traffic for our dealers during the fourth quarter," commented Paul Pejza, manager of GM Certified Used Vehicles.

Despite an overall downturn, including a dampening at GM Certified Used Vehicles (down 16 percent to 30,375) and Saturn (down 7 percent to 817), several of GM's individual brands actually showed an uptick in certified sales.

For instance, Saab moved 687 units, a 22-percent increase, and Hummer sold 193 CPO vehicles, a 41-percent improvement. Cadillac, meanwhile, sold 3,269 CPO models, 8 percent more than a year ago.

GM Certified also celebrated its 3 millionth CPO sale in September. Officials indicated GM is the first automaker to achieve that feat.

"GM Certified dealers have a strong selection of inventory available to customers, and our dealers indicate that many consumers unable to afford a new vehicle are turning to GM Certified Used Vehicles to give them the affordability, value and peace of mind that comes with a vehicle backed by the factory and the dealer," Pejza added.

Among other domestic brands, Chrysler reported certified sales of 8,211 units in September, a 13-percent downturn from last year. Year-to-date sales, however, are actually up 3 percent compared to 2007.

By brand, Chrysler sold 2,550 units during the month (down 14 percent), Jeep moved 2,402 CPO vehicles (9 percent) and Dodge sold 3,359 units (down 15 percent).

At Ford, its dealer body sold 10,984 certified models, a 17.1-percent drop from last September. By brand, Lincoln/Mercury recorded CPO sales of 1,518 units, a 17.4-percent softening. Ford, meanwhile, sold 9,466 certified vehicles, down 17.1 percent from last year.

Moving on, Toyota recorded CPO sales of 19,301 units, a 19.3-percent softening from a year ago. However, year-to-date sales are up 2.8 percent and officials hope strong inventory mix and special financing offers can help boost sales in the fourth quarter.

"With the strength and value of Toyota's fuel efficient and hybrid models, together with trucks, we look forward to sustained growth in the final stretch of the year," explained Norm Olson, sales operation manager for Toyota Motor Sales USA.

"Also, in addition to providing new-car financing rates for Toyota Certified Used Vehicles, Toyota just announced a national 3.9 percent APR, 66-month financing program for the fourth quarter of the year on all TCUV Tundra, Sequoia, and 4Runner models," he added.

Moving on, Volvo moved 2,070 certified units in September, a 4.8-percent uptick from a year ago. Its year-to-date CPO sales are 19,842 models, up 11 percent from the same period of 2007.

"What is not visible in the numbers is that the number of Volvo retailers have decreased year-over-year, as a result, the number of CPO units on a per retailer basis has actually increased even more," explained John Lee, pre-owned car line manager at Volvo Cars North America.

"The Volvo CPO program success is attributed to our strong retailer network in promoting the program benefits and communicating to consumers the benefits and value of the program," he added.

Audi, meanwhile, sold 1,942 CPO vehicles during the month, a 10.6-percent decline from September 2007. Year-to-date sales (25,725 units), however, remain on the upswing compared to last year (19,630).

During September, the automaker's Eastern region sold the most units (1,034), followed by its Western (519) and Southern (389) operations.

Over at Mercedes-Benz, the brand reported sales of 4,973 units, which is a 13.3-percent improvement from a year ago.

"In today's environment, we at Mercedes-Benz are advertising the new-like experience for a CPO price to our customers," stated Mark Webster, national pre-owned operations manager. "We are also promoting our vehicles as: Certified. Affordable. Luxury."

Subaru, meanwhile, was up 76 percent compared to last September as it sold 920 CPO vehicles. In the first nine months of the year, it moved 6,962 certified units, a 142-percent jump from the same period last year.

"We are very encouraged to see Subaru CPO continue to grow year-over-year despite challenging market conditions," stated Jim Sarchese, national manager of Suburu Added Security. "We continue to see 2008 finishing with a similar rate of increase and could actually see growth accelerate if higher levels of inventory were available."

Continuing on, Volkswagen dealers posted CPO sales of 3,191 units, a 30.6-percent improvement over last year.

Porsche sold 478 certified units during the month, down slightly from 486 a year ago. Yearly sales are at 5,478, compared with 4,917 in the same period of 2007.

Among other brands, Honda suffered an 18.1-percent dip, as it sold 13,083 units compared with 15,982 in the same period of 2007. In addition, Acura's certified sales were 2,724 units, down 11.4 percent.

As for Hyundai, it sold 700 units, improving from 575 last September.

BMW moved 7,707 certified units during the month, compared with 7,421 a year ago, while Mini sold 175 CPO vehicles versus 80 in 2007.

Furthermore, Mitsubishi dealers sold 92 models, falling from 130 a year ago.

And Land Rover posted certified sales of 918 units, up from 571 the previous September. CPO sales at Jaguar, meanwhile, dropped from 757 units to 658.

Finally, Kia sold 227 certified units during the month. Its 2007 numbers are unavailable as this is its first year of reporting CPO data.

Used Car Manager