CPO Sales Slide in July, but Yearly Pace Ahead

Last month, the certified pre-owned market dropped modestly compared to what ended up being the best CPO month of 2010, according to Autodata Corp., but sales moved ahead from June.
What’s more, year-to-date certified sales stayed in front of last year’s pace and many automakers have enjoyed especially strong CPO sales through the first seven months of 2011.
Several had rather robust July sales total, with two (Honda and Kia) posting all-time CPO records, according to Autodata.
But what do they have in store for the fall and winter to keep this momentum rolling?
A few CPO executives shed some light on this topic and offered their perspectives to Auto Remarketing.
At Volkswagen, for example, CPO sales this year have climbed 45 percent at 43,919 units. For July in particular, VW certified sales were up 14 percent at 6,424 units.
When asked what the automaker has in store for the second half to help continue the momentum, VW’s Scott Weitzman told Auto Remarketing that the company plans to maintain its CPO finance offer rolling.
“Volkswagen will continue to support CPO with aggressive financing terms through Volkswagen Credit. The first half of the year has been so successful and the demand continues to be so strong, we would continue setting records without that support,” he explained. “But, we do want to ensure VW customers are treated well and provided competitive market rates.”
Additionally, Weitzman said the plan is to teach shoppers about the state of the used market so they can have a firm grasp of its "dynamics."
“Most drivers of recent model vehicles do not truly understand how the strength of the market could positively impact them. We want drivers to know they can bring their cars to a dealership and very likely trade out of their lease or purchase at unprecedented prices,” Weitzman explained.
“These customers can upgrade to a comparable new vehicle with little or no walk-in payment. Spurring that type of activity in the marketplace will have a further positive impact on dealers’ used-car operations, given the lack of used-car inventory currently available,” he added.
“We think promoting this is a great way to stimulate new-car demand, increase customer loyalty and get more used cars into the hands of our dealers. Many dealers are already engaged in this activity, but we know that customers sometimes put more weight into statements coming directly from Volkswagen,” Weitzman further commented. “We want educated customers that engage positively with our dealers and turn their vehicles faster than ever, a benefit to all parties involved.”
Over at Mercedes-Benz, the automaker’s certified sales are down 5.1 percent compared to last year, which ended up being a record CPO year for the company.
The company is planning to roll out a pre-owned training class this fall, and hopes the program can connect with 85 to 100 stores during the second half of the year, said Scott Penza, manager of pre-owned operations at Mercedes-Benz USA.
“We are continuously working to enhance our MBCPO Program for both our customers and our dealers. Early this fall we will launch a new pre-owned training class, CPO Pro. This class will replace another class that was offered the last four years,” Penza explained.
“Our dealer network has adapted and prospered and it was time to begin a more portable training approach that can be constantly evaluated and updated to reflect current market situations,” he added. “We continue to capture and share best practices learned during these classes as this is also a key resource for our dealers. Our goal is to reach 85 to 100 stores in 3Q and 4Q.”
BMW also has an educational outreach program slated for the fall to help dealers.
“We have specially designed CPO Workshops throughout the country beginning early fall. The 2.5-day workshop is presented by BMWFS and BMWNA CPO experts, as well as key vendors in our processes," explained Matt Abshire, pre-owned programs manager for BMW Financial Services.
"The goal is to not only teach best practices in the sales, marketing and certification processes involved with CPO, but also to gain critical insight and ideas from our dealer partners," he added.
Moving along to discuss Japanese brands, Honda’s national remarketing manager Dan Crowe shared his take on what he believes will be the biggest hurdle for his dealers for the rest of 2011 and how he advises they overcome such a challenge.
“The challenge for the remainder of the year for both Acura and Honda dealers will be finding good quality vehicles for the program,” Crowe noted. “The dealers will have to be very creative in developing all their sources as well as using the tools that American Honda provides such as the VIPS program and the power of leads.”
CPO Sales by Automaker
Moving along to share more specific CPO data, the industry moved 150,885 certified vehicles in July, down 1.5 percent year-over-year, according to Autodata. On a month-over-month basis, it was a 1.4-percent gain.
Through July, there have been 1.02 million CPO sales, a gain of 6.9 percent.
For the Big 3, they combined to sell 47,575 CPO units in July, a 4.9-percent decline from July 2010. Yearly sales for domestics have hit 322,873 CPO rides, a 0.6-percent uptick.
Breaking it down, Ford posted 11,329 CPO sales in July, a 4.2-percent drop-off from a year ago. Year-to-date sales have declined 6.9 percent to 74,995 units. The Ford division moved 9,431 CPO units in July (down 5.9 percent), while Lincoln/Mercury CPO sales reached 1,898 units (up 5.9 percent).
General Motors’ CPO sales for the Buick, Chevrolet, GMC, Pontiac and Saturn brands came in at 24,191 units for July, down 8.5 percent year-over-year. Yearly sales for those brands reached 166,090 vehicles, a 2.5-percent hike.
Cadillac CPO sales climbed 0.4 percent at 2,098 units in July, while year-to-date certified sales have fallen 5.4 percent at 14,213.
There were 61 certified Hummers sold in July, compared to 86 a year ago.
“We’re continuing our stride of year-to-date sales gains, though the industry is responding to tighter inventory,” stated Larry Pryg, the national manager of the automaker’s Certified Pre-Owned Vehicles program. “Our customers are seeing value in our product and standard vehicle maintenance plan, and our dealers continue to be engaged, as more are joining our program.”
Chrysler moved 9,896 certified vehicles during the month, a 2.8-percent lift. Year-to-date sales reached 67,130 CPO units for a 7.8-percent uptick.
By division, Jeep led the way with 3,660 sales (up 9.3 percent) in July, followed by Dodge (down 6 percent with 3,414 CPO sales) and Chrysler, which moved up 6.8 percent with its 2,822 CPO units sold.
Moving along, at Honda, the division moved 21,186 CPO vehicles in July, its best month ever. It compares to 20,062 certified sales a year ago.
Honda’s year-to-date CPO sales have hit 135,482 units, compared to 116,847 units in the first seven months of 2010.
In July, there were 4,302 certified Acuras sold, down from 4,790 in July 2010. The year-to-date sum has reached 29,699 CPO vehicles, up from 25,548 a year ago.
“July was an outstanding month for HCUC. The Honda dealers sold 21,186 units representing an all-time sales record for the certified program,” Crowe noted.
“For the ACPV program, the Acura dealers maintained strong sales throughout the month and finished with 4,302 units. This represented our third-best-performing month for the ACPV program,” he added.
Moving on, Mercedes-Benz dealers moved 5,895 certified units in July, down 14.7 from July 2010. In the first seven months of the year, the company has posted 45,750 CPO sales, a 5.1-percent drop.
Audi sold 3,506 CPO vehicles in July, compared to 2,766 a year ago.
Through July, Audi has moved 22,348 certified rides in 2011, compared to 16,272 units through the first seven months of 2010.
Over at Hyundai, it achieved its strongest-ever July with 4,035 CPO sales, which also marked the second-best certified month for the automaker. Sales were up from 2,170 units in July 2010.
Year-to-date sales were at 23,920 CPO units, compared 11,438 certified sales in the year-ago period.
Kia had a record 747 CPO sales in July, up from 698 in July 2010. Through July, it has moved 4,679 certified vehicles for 12.3-percent gain.
Toyota sold 29,287 certified vehicles in July, down from 29,344 CPO sales last year. Its sales through the first seven months of 2011 hit 196,393 vehicles, besting the sum from same period of 2010 (182,735 CPO sales).
Meanwhile, the Lexus division posted its strongest July ever with 6,118 CPO sales, which marks a 6.3-percent increase over July 2010, which was the previous record.
Yearly CPO sales have also climbed 6.3 percent for Lexus, which has moved 41,616 CPO units.
BMW sold 6,778 certified vehicles last month, a 31.3-percent decrease. Its year-to-date tally was 51,556 units, a 22.5-percent drop.
Continuing on, the Nissan brand moved 7,548 certified vehicles in July (down 2.7 percent) and its year-to-date sum is up 7.5 percent at 50,320 CPO sales.
Meanwhile, Infiniti posted July CPO sales of 1,099 units, a 9.7-percent increase. Yearly sales are up 10.8 percent (7,427 units).
There were 1,244 CPO sales at Volvo, down from the 1,729 certified units sold in July 2010. Year-to-date, the automaker has moved 7,521 CPO units, compared to 10,865 units in the prior-year period.
Mazda sold 1,594 CPO rides, a 65-percent hike. Through July, it has sold 10,553 certified vehicles, a 185-percent gain.
Subaru CPO sales totaled 1,910 units last month for a 3-percent lift. In the first seven months of 2011, the company is up 26.4 percent at 13,896 certified sales.
Among other automakers, Porsche tallied 779 certified sales, a 25.8-percent year-over-year lift.
Jaguar sold 352 certified rides, compared to 450 in July 2010. Land Rover came in at 153 certified sales, compared to 271 a year ago.
Mini posted 213 certified sales, compared to 194 units sold last July.
Sixty-two certified Saabs were sold, versus 263 in July 2010.
Mitsubishi sold 27 CPO units, compared to 51 a year ago. Maserati had CPO sales of 21 units, down from 26 a year ago.
Bentley was estimated to have sold 30.