Even though 2011 marked a dramatic downturn for off-lease volume — which is perhaps the most significant lifeflood for the certified pre-owned supply — some automakers are expecting that 2012 will present even more challenges for securing CPO inventory.

So, in order to continue the momentum from a record year for certified sales in 2011, automakers know their dealers will have to be vigilant in going after CPO eligible vehicles. With this backdrop, some of the industry’s top CPO executives shared with Auto Remarketing how their dealers plan to find the used cars necessary to pull of another strong year.

In 2011, of course, the CPO market was stronger than its ever been, sales-wise.

More than a dozen brands posted yearly certified pre-owned sales records and the CPO industry had its best year ever in 2011, which was also the first year the market has ever eclipsed 1.7 million sales, according to Autodata Corp.

Overall, there were 1.74 million certified sales, marking a 6.4-percent year-over-year rise, as indicated by Autodata’s statistics. The year closed with the strongest December ever, with 157,486 CPO sales (up 14.1 percent).

The 15 brands that Autodata indicated as having achieved best-ever CPO years were Acura, Honda, Hyundai, Infiniti, Kia, Lexus, Maserati, Mazda, Mercedes-Benz, Mini, Nissan, Porsche, Subaru, Toyota and Volkswagen.

Of course, all of this occurred in a year where inventory was low, something that dealers and automakers will have to deal with again in 2012. So how do they plan to adapt?

Starting with Honda and Acura, national remarketing manager Dan Crowe said 2012 will likely be even more challenging inventory-wise and dealers will have to respond.

“(2012) will provide a much bigger challenge for dealers in finding quality vehicles for the CPO program. They will have to continue to work the online auctions and lease returns more aggressively,” Crowe said.

“But the best option is to look internally. To mine their own database, looking for one-owner vehicles they know their story (service history),” he continued. “That story will provide real value to a potential customer and hopefully boost new vehicle sales.”

Volkswagen’s Scott Weitzman stressed the need for his dealers to work closely with recent new-car customers and take advantage of the CRM tools that allow them to find customers with equity in their vehicles. This year is likely to be more challenging supply-wise than 2011, Weitzman noted.

“Dealers must continue to take advantage of the positive equity that recent new vehicle purchasers have in their vehicles. They will aggressively market to their new car customers and shorten the cycle of buying in order to keep their CPO inventory fresh and strong,” he said.

“CRM tools that identify customers in equity will be utilized exhaustively to pull customer trades into the stores ahead of their scheduled maturities,” Weitzman continued. “VW has had such great success pulling units ahead in the fourth quarter that eligible CPO inventory will be in a tighter position for 2012 than in 2011.

“But the opportunity is greater to continue the activity of early turns for new car customers. 2013 lease maturities are 50-percent larger than 2012, providing a significant number of vehicles that can help normalize inventory for 2012,” he added.

Weitzman went on to encourage dealers to search out wholesale buying opportunities in areas of the U.S. where leasing is strong, giving the Northeast and Southeast as examples.

“There are excess CPO-eligible units available off-lease in those markets and an opportunity for other dealers to make up their shortfall with aggressive buying tactics,” he pointed out.

Over at Mercedes-Benz, manager of pre-owned operations Scott Penza said the market should see volumes climb by the end of the year but acknowledged the challenging 2012 ahead.

“The loyal customer pool is the best place to start finding inventory. Staying in touch with your customers will increase the odds of that customer or family returning to your store,” he commented.

“Like everyone else, we are limited by the sales from 2008 and 2009 that were much lighter than expected,” Penza continued. “This history has created both a challenge and a great opportunity.

“Aggressive stores with benchmark processes are able to maximize trade-ins, as well as pull forward lease maturities given the supply/demand dynamic the market is experiencing,” he added. “By late 2012 the industry should start to see volumes increase in preparation for 2013.”

Next up was Volvo, where pre-owned car line manager Steve Golow said the automaker is urging its dealers to turn to the Web to find product.

“We will advise our retailers to focus more and more online,” he said. “Also to look at new trends with auction houses where they will buy and sell cars locally so retailers can refresh their inventory. Manheim is trying this out in certain markets.”

Looking in more detail at some of what Volvo is seeing in lease returns, Golow said the company is expecting about a 12-percent rise in off-lease volume.

“A bit of better news, but still not enough cars to make an impact,” he commented. “We are looking into service programs to help retailers obtain these cars.”

Toyota, meanwhile, is likely to see a decline in off-lease units and cars available at auction this year, but Brad Heagy — the retail sales and operations manager for TCUV/TRAC — said he knows his dealers will be “resourceful” in finding vehicles any way they can.

“Stores will continue to pursue service drive customers and given Toyota’s expected new vehicle sales plan for 2012, we remain confident that our dealer partners will be successful in securing higher trade volumes to support their TCUV efforts,” Heagy shared.

Continuing on to BMW, pre-owned manager for sales Thomas Kurz is anticipating tight supply again for 2012.

“We do expect again a year with supply constrains of pre-owned vehicles, which will certainly lead, as in 2011, to a comparable low auction volume, as the majority of the off-lease vehicle will be remarketed via our BMW dealer organization,” Kurz noted.

“BMW has been able to sell again the most pre-owned and CPO vehicles in the premium segment in 2011, showing that we have the right programs in place and that our dealer are able to adopt to this new situation,” he added.

When asked about dealers tapping to their service lanes, Kurz had this to say: “The expected low pre-owned volume is expected to lead again to higher used-car values in 2012, similar to 2011, allowing dealers to make current owners very attractive offers to upgrade into a newer car. We expect that this will remain an attractive source for new and CPO car sales.”

Automakers Notch Strong Sales

Moving on to the monthly and full-year results, Autodata pointed out that more than half of the CPO market (50.8 percent) was commanded by Asian brands.

Almost all of the Asian brands posted gains from 2011, with several climbing double digits.

Over at Honda, for example, its namesake division climbed 12.4 percent year-over-year and reached 228,506 certified sales in its record-breaking year. Honda closed 2011 with 20,879 CPO sales in December, compared to 17,106 sales in December 2010.

As for the Acura brand, its best-ever CPO year included 48,024 full-year sales (up 6.3 percent) with a final month of 4,028 sales (down from 4,318 in December 2010).

Moving over to Toyota, the brand not only marked its best-ever year, but had its strongest December on record, as well. It moved 331,805 CPO units in 2011, compared to 315,440 in 2010 (which was the previous record). Sales for the final month of the year were at 29,081 units, compared to 27,201 CPO sales in December 2010.

Lexus moved 70,215 CPO units in 2011 for a 2.7-percent gain and hit its second strongest December with 7,005 certified sales (down 1.3 percent).

Over at Mazda, its best-ever year (19,875 CPO sales; up 89 percent) was capped by a best-ever December where it sold 1,845 CPO units (up 19 percent).

Next up, the Nissan brand sold 91,774 CPO units in 2011 (up 14.2 percent) and moved 8,365 certified vehicles in the final month of the year (up 42.8 percent).

Infiniti sold 13,262 CPO vehicles for the year (up 16 percent) and had December sales of 1,224 vehicles (up 39.4 percent). Its monthly sales for December marked a best-ever month for the brand.

Hyundai posted CPO sales of 48,867 vehicles for the year, more than double the 22,688 certified sales in 2010. In addition to achieving its strongest year, December was Hyundai’s best-ever month for certified, as it moved 5,556 units, up from 2,274 sales in December 2010.

Meanwhile, Kia posted 10,035 certified sales in 2011, up from its previous all-time high of 7,052 CPO sales in 2010. Moreover, its December sales were at   1,279 units, compared to 572 sales set in December 2010.

“Kia achieved an all-time high in December and an all-time high in 2011, topping 10,000 CPO units for the first time. We continue to work very hard to establish a tier 1 CPO Program for our Kia dealers and our success in 2011 proves that we are on the right track,” said David Carp, director of fleet and remarketing for Kia Motors America. “We look forward to more records in 2012 as our current lease portfolio begins to mature.”

Subaru sold 23,649 certified units in 2011 (up 12.8 percent) and reached December sales of 2,011 vehicles (down 11.6 percent).

On the domestic side of the market, General Motors said its dealers sold 308,995 CPO units in 2011 for a 4-percent gain. The final month of 2011 saw GM  move 27,627 certified vehicles (up 20 percent).

“Throughout 2011, we have responded to the needs of our consumers and dealers, providing them with significant new program benefits,” stated Larry Pryg, national manager of Certified Pre-Owned Vehicles at GM.

“Between the addition of Owner Care and a more robust vehicle inspection process, these improvements have given our customers more reasons to choose our brand, while also increasing our dealers’ satisfaction and engagement with the program,” he continued.

Next up was Ford, which achieved full-year sales of 130,330 units (a 1.5-percent decrease) and posted December sales of 11,859 units (a gain of 16.9 percent).

The automaker said Ford/Mercury certified sales reached 114,548 units for the year (down 4.8 percent) while the Lincoln brand moved 15,782 CPO units (up 30.7 percent).

Over at Chrysler, it sold 114,852 certified vehicles for the year (up 7.1 percent) and moved 10,232 CPO units in December (up 13.6 percent). By brand, Dodge had the strongest CPO year with sales of 44,852 units (up 7.1 percent), followed by Jeep with 40,457 CPO sales (up 10.3 percent) and Chrysler, which sold 29,543 certified vehicles (up 3.1 percent).

Moving on to the European automakers, BWW moved 84,327 certified sales for the year (down 24.8 percent). It sold 7,693 CPO vehicles in December (down 21.2 percent).

VW sold 72,969 CPO units for the year (up 32.2 percent) and finished 2011 with 6,142 CPO sales in December (up 25.8 percent).

Mercedes-Benz notched full-year certified sales of 74,571 units (down 7.6 percent) and moved 6,112 certified vehicles in the final month of the year (down 3.4 percent).

At Volvo, its dealers sold 12,908 certified vehicles for the year, compared to 17,128 CPO sales in 2010. During December, it posted 1,153 CPO sales, relatively flat from December 2010 (up 0.4 percent).

Audi hit a grand total of 37,259 CPO sales for 2011, compared to 28,520 sales during 2010. Its December sales total was 3,406 units, compared to 2,877 CPO sales in the prior-year period.

Among other automakers, Jaguar sold 3,941 certified vehicles (down 10 percent) for the year, while Land Rover was up 13.6 percent at 3,370 certified sales.

Porsche reached yearly CPO sales of 8,323 units (up 10.7 percent). Mini’s yearly CPO sales were 2,104 units (up 2.5 percent). Saab sold 885 certified vehicles in 2011 for a 66.3-percent decrease.

Mitsubishi sold 540 certified cars for the year, down 2 percent from 2010. Maserati moved 351 certified vehicles in 2011, a 37.6-percent hike.

Bentley was estimated to have moved 360 CPO vehicles in 2011.