BANDON, Ore. -

Used sales are expected to lose some traction in June after a slow start to the month for independent dealers’ sales and private-party sales, according to CNW Research. The company is projecting a year-over-year decline of 3.5 percent in the used-vehicle market for June.

Specifically, CNW projects 4.46 million used vehicles will be sold in June, down from 4.62 million units a year ago.

Interestingly enough, although independents (down 6.5 percent) and private-party sales (down 7.2 percent) are expected to decrease, CNW believes franchised dealers will see their used sales climb 2.8 percent in June.

“Price, however, should be up slightly for both franchised and independent dealers,” said CNW president Art Spinella.

In fact, the average transaction price for franchised dealers is forecasted to be $11,178, up from $10,523 in June 2010, according to CNW. Likewise, independent dealers are expected to see transaction prices climb from $8,811 last June to $9,651.

May Segment Trends

Continuing on, CNW’s latest report also delves into the market share that respective used-vehicle segments grabbed in May.

Of the six segments listed by CNW, the SUV/crossover segment grabbed the most market share at 23.06 percent, followed by the small car segment (21.62 percent). The standard car segment was next (18.83 percent), though it was down from 24.78 percent in May 2010.

The other segment to see a year-over-year decrease in market share was the full pickup segment, which saw its share drop from 13.07 percent to 7.53 percent.

The small pickup category was fifth at 5.12 percent, followed by minivans at 2.63 percent.

CNW Addresses "Wholesale Bubble"

Moving over to the wholesale side of the used market, it’s no secret that prices have continued to climb. But how far will they go?

Spinella shed some light on this question by addressing whether the high values are “a bubble or simply a deflating air mattress.”

He noted: “Here’s the reality: Used prices are dictated by new prices and demand for new vehicles. If new sales continue to stay weak because of economic and confidence levels of consumers, incentives could make transaction prices decline.

“Lower transaction prices mean lower retail prices for used cars (maintaining the dollar distances between the two),” Spinella continued. “That obviously reduces the amount dealers are willing to spend at wholesale.”

In the event of the “highly unlikely” worst-case scenario where new-vehicle sales would completely tank, there is the possibility of a 12-percent to 16-percent decline in wholesale prices by the end of 2011, he explained.

“A more likely scenario: Expect wholesale prices to slip in the third and fourth quarter, perhaps 3 to 5 percent,” Spinella noted. “Much also depends on how quickly Toyota gets back on line.”

Newspapers Still Have Pull in Used-Car Advertising

It may seem that a major viewpoint regarding  today’s media world — and throughout the various industries that advertise in it — is that traditional media like local newspapers have run their course.

For the used-vehicle market, this is not the case, according to Spinella.

In fact, almost three-fifths of used-vehicle buyers tap into local newspapers in their shopping process, be it online or in print. The 59.23 percent of used shoppers who use local newspapers as their primary information source is actually from 2006, when it stood at 58.77 percent, according to CNW’s data.

Meanwhile, the proportion of shoppers claiming the Web as their primary source has climbed from 13.5 percent to 18.33 percent in the same time frame.

“While Internet is growing as a primary source of used-car information among shoppers with roughly 18.3 percent of eventual pre-owned vehicle buyers saying they used the web as their primary source of information, a dominant 59 percent still rely on newspapers — either the print or electronic versions,” Spinella stressed.

“And therein lies the newspaper industry’s ace-in-the-hole. In an industry that has relied on paper for hundreds of years, the transition to digital has been a grueling one as publishers try to find a way of profiting from the ‘new’ media,” Spinella continued.

“And while most major newspaper outlets still are struggling with that area of the business, some small papers have not only made the transition but found ways of turning a profit,” Spinella continued.

He gave one example of what’s known as “flyer boards.” Municipalities often have communal bulletin boards for getting the word out about things like garage sales, posting business cards or posting a notice about a lost pet. In the same spirit, the “electronic flyer boards” have brought a digital element to this and have a small fee to use, Spinella said.

As a result, the concept is starting to gain some steam and “is also driven by the ability to read flyers on mobile devices, smartphones to iPads,” Spinella shared.

He concluded: “Will it be enough to salvage what was considered a dead industry just a few years ago? Used-car shoppers have increased their use of newspapers since 2006 so it may not be too late.”