Manheim Reveals Used Car Market Report at NADA

During the National Automobile Dealers Association’s convention today Manheim released its annual Used Car Market Report. The company revealed that after four straight years of declines, both new- and used-vehicle retail sales climbed in 2010.

However, wholesale supply declined for the third straight year, “presenting challenges for the nation’s automobile dealers that were often solved with the support of auctions,” according to Manheim management.

“Although the auction industry itself has not yet fully benefited from the economic and automotive recovery that is underway, auctions have contributed to the success of others. For example, it is hard to imagine how dealers would have coped with rising used-vehicle demand and restricted used-vehicle supplies without the services of the auction industry. Online searching and the ability to buy anytime, anywhere enabled dealers to profitability grow their used-vehicle operations,” explained Manheim’s Tom Webb.

Along with sections on the used-vehicle marketplace and the remarketing industry, the report also features interviews with key association leaders and chapters from all corners of the used-vehicle industry, including dealers, rental, government and commercial fleets, repossessions and the salvage industry, according to the company.

Some of the trends Manheim discovered include:

 New- and Used-Vehicle Markets

 

—After falling to a 27-year low in 2009, new-vehicle sales increased 11 percent, or by more than 1.1 million units, in 2010 to 11.6 million units. That is still the second-lowest total in 28 years.

 

 —The increase was driven by a 22-percent jump in fleet purchases, as fleets made up for a very low level of acquisitions in 2009.

 

—The consensus outlook for new-vehicle sales in 2011 is 13 million, though Webb believes there is a strong possibility that figure will be exceeded.

 

—Used-vehicle sales rose 4 percent to just under 37 million units in 2010, and the ratio of used-vehicle sales to new-vehicle sales remained well above 3-to-1.

 

—Manufacturer-certified pre-owned sales rose 7 percent to 1.6 million units. Meanwhile, sales of lower-priced units were aided by a resurgence in subprime lending.

 

Auction Activity

 

—After three years of declines, auction volumes in 2010 were estimated to be 12-percent below 2007’s level. Primary reasons for the decline in 2010 were fewer repossessions, rental program vehicles and off-lease units.

 

—Wholesale vehicle transactions were an estimated 19 million, 8.4 million of which were handled by National Auto Auction Association member auctions.

 

—Online activity in the wholesale industry continues to grow: At Manheim, online sales represent 21 percent of total used-vehicle transactions, 25 percent of salvage vehicle purchases and 33 percent of specialty and heavy Truck and equipment sales.

 

—Manheim.com currently receives nearly 900,000 visits per week, with 100,000 vehicles searchable each day via the site’s PowerSearch function.

 

Dealers