CPO Sales Dip, But Stay Ahead of 2010 Pace

Monthly certified pre-owned sales fell on a year-over-year basis for the first time since July, but the current sales pace remains well above year-ago levels. The market again saw multiple brands reach best-ever certified sales.
Overall — according to statistics from Autodata Corp. — there were 139,532 CPO sales in October, down 1.4 percent year-over-year. Through 10 months, there have been 1.45 million certified vehicles sold, which is 5.4 percent stronger than the year-ago period.
One of the automakers Autodata listed as posting best-ever sales — Mazda — was able to achieve its strongest CPO month of all time thanks in part to the success that its regional teams have had in educating and engaging dealers, said Mazda CPO and remarketing manager Roger Basa.
The automaker moved 1,671 certified vehicles during the month, a 23-percent year-over-year hike. That pushed its year-to-date total to 15,492 CPO sales, a 104-percent gain.
“Part of the equation to Mazda’s recent success has to go out to our strong regional teams who continue to educate the dealer body in the benefits of the Mazda CPO program,” he noted. “More dealers than ever are engaged in the program, our APR offering remains strong and more and more customers are understanding the value proposition of owning a certified pre-owned Mazda.
“We expect this trend to continue as the goal is to get 100 percent of our dealer body into the program,” Basa continued.
Kia, the other automaker that posted best-ever CPO sales, moved 1,109 certified units in October, a 113.7-percent increase. Year-to-date, it has moved 7,552 certified vehicles for a 27.9-percent gain.
Likewise, fellow Korean brand Hyundai had its strongest October ever for CPO and this was its second-strongest certified sales month of all time.
It moved 4,836 CPO vehicles, compared to 2,444 units a year ago. Year-to-date sales are at 38,486 units, up from 18,348 CPO sales in the same period of 2010.
Other automakers also shared with Auto Remarketing how they were able to achieve strong CPO results in October.
At Volkswagen — whose CPO sales came in 5,534 units, up from 5,091 certified sales in October 2010 — manager of pre-owned operations Scott Weitzman said an “aggressive” trade-in program helped dealers generate some much-needed inventory, and it appears to be working.
In the first 10 months of the year, VW moved 64,488 certified vehicles, compared to 45,709 CPO sales in the year-ago period.
“Sales of CPO vehicles at VW dealerships stayed surprisingly strong through October. While the stock levels of three- to four-year-old units has been dwindling down due to a lack of lease maturities, sales of one- to two-year-old vehicles has been taking up the slack,” said Weitzman.
“Our dealers have benefitted from an aggressive trade-in program that is pulling ahead retail and lease customers from their scheduled contract expirations,” he continued. “Volkswagen customers are capitalizing on their positive equity position by trading in their vehicles years earlier than they ordinarily would have.
“Many lease customers are walking into new vehicles barely a year into their contract, increasing new-vehicle sales turn while simultaneously providing prime CPO units to dealers starving for inventory. Over the last 30 days, we have spiked our CPO inventory levels with hundreds of late-model used VWs that have been traded-in as early as four years from the original contract expiration,” Weitzman added.
On the domestic front, General Motors said certified sales for its dealers came in at 25,298 units, up 2 percent year-over-year.
Year-to-date, they have moved 256,496 CPO units, which is 11-percent stronger than the year-ago period.
“October was a month of growth — from sales and share increases to consecutive inventory improvement — despite an industry-wide decline,” stated Larry Pryg, GM’s national manager of certified pre-owned vehicles. “This past month was another proof point of the value our program offers customers; specifically, our unique maintenance program, standard with all vehicles."
Over at Ford, its dealers sold 10,965 certified vehicles, a 1.3-percent year-over-year gain.
By division, the Ford brand had 9,160 CPO sales, a 0.6-percent hike. And while Lincoln/Mercury was up 5.1 percent with 1,805 sales, the Lincoln brand itself climbed 25.3 percent, officials pointed out.
Through October, the automaker’s brands have combined to move 107,556 certified vehicles this year, down 4.2 percent from the same period of 2010.
“Ford and Lincoln dealers led CPO sales higher in October,” said Ford CPO manager Glenn Burke, pointing out the overall gain and the especially strong hike for Lincoln.
“Inventory levels also increased year-over-year. Dealers have been creative in finding CPO eligible inventory beyond the traditional means of auctions and trades,” he continued. “For example, dealers have been using the morning service lanes and private sellers on third-party sites as a means of acquiring late-model used inventory. We look forward to a strong close to 2011.”
Moving on, Chrysler sold 9,157 certified vehicles in October, which was 3.2-percent softer than the year-ago time frame. Year-to-date, Chrysler has moved 95,167 certified vehicles for a 6.2-percent gain.
By brand, there were 3,950 certified Dodge models sold in October (up 4.8 percent), Jeep was essentially static (down 0.8 percent) with 3,238 CPO sales and the Chrysler brand had certified sales of 1,969 units (down 18.7 percent).
Over at BMW, dealers sold 6,271 CPO units in October, down from 9,189 certified sales a year ago. Year-to-date sales are at 70,767, compared to 94,313 CPO sales through October 2010.
“I would say that our used-car business in general remains quite strong. Consumers still see the value in used cars, and though consumer confidence remains quite shaky in general, consumers for premium brand used cars seem to be more resilient than the general market,” said Stephen Saward, manager of pre-owned sales and corporate fleet for BMW of North America.
“We have seen a leveling in the mix between certified and non-certified cars, as we anticipated. Given the strength in the used-car market, some dealers are finding that it is difficult to put the cost of certification plus the additional reconditioning costs to certify the car on top of the strong used-car prices and market that car effectively against the aggressive new-car prices that exist in the marketplace,” Saward continued.
“Additionally, the low interest rates that are currently more widely available in the marketplace means that the special offers generally attached to certified cars have a bit less of an advantage,” he added.
Saward went on to note that BMW knew a couple years back that the lease-return drought would likely occur, meaning dealers “would need to become more creative in sourcing for their used-car departments or suffer a corresponding volume drop.”
As such, BMW helped its dealer network get ready for this drought.
“We continue to focus on encouraging dealers to retain and retail older cars which they might previously have wholesaled, and while that is helping our total pre-owned volume, it means that certified vehicles have become a smaller piece of the pie,” he continued. “This refocus had enabled us to limit the drop-off in pre-owned business in our dealer network to around 5 percent, while lease maturities in 2011 are down by about a third versus 2010.
“As maturities begin to recover in the latter part of 2012, we expect to see a recovery of CPO volume and penetration and have actions in development to support that next stage of business,” Saward shared.
Moving along, Audi sold 2,776 certified vehicles in October, which was 16-percent stronger than the year-ago period. Year-to-date sales are at 31,165, up 33 percent year-over-year.
Volvo, meanwhile, moved 981 CPO units last month, down from 1,224 in October 2010. For the year, it has moved 10,749 certified vehicles, compared to 14,839 units in the first 10 months of 2010.
Toyota’s CPO sales came in at 25,865 units, down from 29,239 certified sales a year ago. In 10 months, it has sold 277,813 certified vehicles, ahead of a year ago, when 263,529 units were sold.
Lexus moved 5,551 certified vehicles last month, a 7.6-percent year-over-year decrease. Through October, it has sold 58,062 CPO units, a 3.6-percent hike.
At Honda, the namesake division posted its strongest-ever October with 17,276 CPO sales — up from 17,097 certified sales a year earlier — and the Acura division reached CPO sales of 3,623 units, down from 3,931 sales in October 2010.
As for year-to-date sales, Honda has moved 189,517 units (up 11 percent) and Acura has sold 40,601 units (up 8.9 percent).
Mercedes-Benz sold 5,571 certified units in October, down 21.76-percent year-over-year. It has moved 62,929 CPO rides in the first 10 months of 2011, a 7.6-percent dip.
Over at Nissan, the Nissan division sold 8,075 certified vehicles (up 20.1 percent), while Infiniti sold 1,180 CPO units (up 13.1 percent).
On a year-to-date basis, Nissan’s sales have reached 75,603 units (up 10.6 percent); and Infiniti’s have reached 10,949 units (up 14 percent).
Subaru moved 1,930 CPO units last month (up 1.8 percent) and its year-to-date sales are at 19,603 (up 18.3 percent).
Among other automakers, Jaguar sold 293 certified vehicles (down 23.7 percent); and Land Rover moved 583 units (up 119.2 percent).
Mini sold 174 certified vehicles, compared to 143 last October. Porsche’s certified sales came in at 652 units, a 15.8-percent gain.
Saab moved 71 certified cars, down from 212 a year ago.
Maserati sold 16 CPO units, compared to 21 in October 2010. Mitsubishi sold 25 CPO cars, down from 53 a year ago.
Bentley was estimated to have sold 30.