| -

CARMEL, Ind. — Softer sales on the retail side of the used market kept overall wholesale demand down in July, but because of the robust certified pre-owned retail segment, the wholesale outlook for late-model used units looks to be promising, according to ADESA's Tom Kontos. 

Overall, the average wholesale price was $10,060 during July, he shared. This marked a 0.4-percent year-over-year gain, but a 2.2-percent dip from the prior month.

"Wholesale used-vehicle prices continued to soften in July from their record highs in April. Yet, tight supplies kept prices relatively high even as they followed their typical pattern of weakening during the summer," Kontos pointed out.

He continued: "Generally weak used-retail sales in July limited dealer needs to replace inventory, which reduced demand in auction lanes and online. Retail sales of certified used vehicles were strong, however and this bodes well for wholesale demand for late-model used vehicles." 

Looking forward, Kontos noted:"Similar trends are expected for August, as we approach the fall de-fleeting season that typically hits stride primarily in September and October." 

He said it would be prudent for remarketers to be proactive about the projected supply increase and sell "sooner rather than later."   

"The additional availability of desired vehicles will likely be appreciated by dealers whose inventories are still lean and who have to work extra hard these days to find units that fit their market needs," he added.

Looking at the market by segment, cars were static from the prior-year period. Among the five car segments analyzed by ADESA, the full-size car segment showed the heaviest decrease from July 2009 (down 18.1 percent), while sporty cars had the biggest gain (up 3.4 percent).

Three segments were up year-over-year, while two were down.

Car values fell 1.7 percent from June, and all five segments declined.

Meanwhile, truck values were up 1.2 percent year-over-year and fell 2.8 percent from June. Six of the eight segments showed gains from the prior-year period, including a 10.6-percent in the values of full-size vans.

However, all but two were soft compared to June.

"Prices for full-size SUVs, which have had a strong run-up since their collapse in 2008 when gas went above $4.00 nationally, took a hit in July, though they were still well above year-ago levels," Kontos explained.

"Minivans and mini SUVs, the latter of which includes crossover models, were the only model class segments that showed month-over-month price increases, and these increases were modest (0.3 percent and 0.2 percent respectively)," he continued.

Looking at consignor segments, there was a 3.6-percent dip in prices for OEMs as compared to June, but they climbed 13.2 percent from July 2009. Meanwhile fleet/lease prices were up 3.6 percent year-over-year and down 0.3 percent from June.

Dealer consignment prices climbed 0.5 percent month-over-month and jumped 6.3 percent year-over-year.

Citing estimates from ADESA Analytical Services, Kontos said that at the end of July, there was 29 days' supply of inventory in the auction industry. This is down four days from year-ago level. Kontos noted that this is "continuing to indicate tight supply and high auction throughput."

Retail Used Trends

Examining the retail side of the used market in more detail, Kontos shared some data from CNW Research. According to those statistics, overall used retail sales climbed 9 percent year-over-year in July. Franchised dealers' used sales dipped 0.1 percent, but independents enjoyed a 19.3-percent gain.

That said, retail used sales were off from June. Overall, they fell 11.3 percent month-over-month, with franchised dealers dipping 10.2 percent and independents seeing their used sales drop 12.3 percent.

Citing Autodata Corp. numbers, certified pre-owned sales jumped 19.1 percent year-over-year and 11.2 percent month-over-month.

Sharing the most recent data (June) from the Bureau of Labor Statistics, Kontos said there was a 16.1-percent gain in the consumer price index for used vehicles compared to June 2009.