Webb Highlights Some Recent Market Trends
ATLANTA — Manheim's Tom Webb recently analyzed the financial data of the seven largest publicly traded dealership groups for the fourth quarter of 2009. Webb reported in his March Auto Industry Brief that he found positive trends in regard to both gross margins on used-vehicle sales as well as unit volumes.
Webb determined that gross margins for these groups in the last quarter of 2009 were above their year-ago level. Additionally, he indicated that their unit volumes rose at their fastest pace since the third quarter of 2005.
Webb noted that both J.D. Power and Associates and Edmunds.com released their SAAR predictions late last week. He mentioned that both firms said sales are running at a seasonally adjusted annual rate above 12 million. This is compared to the 10.8 million mark in January and a 10.4 million total in a very snowy February.
He went on to note that 2009 full-year sales came in at 10.4 million.
Wrapping up his report under the backdrop of the economy, which is continuing to send mixed signals, Webb mentioned another encouraging piece of industry news.
Webb asserted that the Federal Reserve's TALF program — Term Asset-Backed Loan Facility — has been very successful in reinvigorating the market for retail used-vehicle loans. As a result, he believes its expiration at the end of this month is expected to be a non-event.
"Today, one is more likely to hear lenders complain about the lack of loan applicants, rather than dealers complaining about turndown rates," Webb noted.
"Tempering this outlook somewhat is the prospect of another wave of foreclosures," he added.