If they’re not already, dealers may soon have a harder time getting used-car inventory than they did in late summer
That’s according to the ZeroSum Market First Report, which is projecting that available pre-owned inventory at the end of September will be 1.15% lower than it was at the beginning of August.
Data from ZeroSum, which specializes in software, marketing and data, indicates there were …
KAR Global chief economist Tom Kontos might have channeled his inner weatherman when he used the term “perfect storm” as part of his description of the current wholesale market.
Kontos elaborated about what he meant and more during another conversation for this episode of the Auto Remarketing Podcast.
To hear the conversation, click on the link available below, or visit the Auto Remarketing Podcast page.
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Sales of vehicles up to 8 years old were steady at auctions the week ending Aug. 16 and continued to be softer than pre-virus forecasts, according to a Used Market Update from J.D. Power.
But certain segments, particularly on the mainstream side of the market, are seeing auction sales climb.
Overall, there were 95,000 auction sales the week ending Aug. 16, same as the week before, continuing a bit of softness in the market, according to J.D. Power's report.
Throughout June and July, weekly auction sales volumes remained at or above 100,000 units.
“While sale volumes remain healthy, sales over the past two weeks have been an average of 7% less than our pre-virus forecast for each respective period,” J.D. Power said in the its report.
Black Book noticed a similar trend its COVID-19 Market Report released Tuesday.
“Wholesale sold volume continued to be lower compared to last year in the last few weeks, as used inventory remains limited and many dealers are searching for alternative ways of acquiring inventory,” Black Book said.
That said, auction sales volumes have improved dramatically since the impact from the onset of the pandemic, and are largely on par with year-ago levels.
A graph in the Black Book report shows how each week of 2020 compares to their respective year-ago levels. While the declines in April were as big as 80%, recent weeks generally show changes in the neighborhood of 10% or less, up or down
“Despite most auctions continuing to operate under an all-digital platform, sales volume has rebounded to a level consistent with this time last year,” Black Book said in its report. “This is being driven by strong retail sales, consumer demand, and the need to backfill, leading dealers to use auctions as their main source of inventory.
“The number of sales bottomed out around an 80% year-over-year decline when most auctions closed their physical sales (and some closed entirely) at the end of March.”
Auction sales rates are also fairly stable. Another graph in the Black Book data set shows the estimated average weekly sales rate at U.S. auctions reached a low of 15% the week of March 30. It then climbed 11 straight weeks, and since the week of June 8, it has remained north of 60%, reaching a peak of 68% for this stretch the week of June 15.
For the week of Aug. 10, it was at 62%.
“At the onset of the pandemic, as shelter-in-place orders went into effect, sales rates quickly tumbled into the teens, but rates began climbing each week and have now stabilized,” Black Book said. “Independents that have been operating a traditional physical sale continue to report the highest sale rates, many consistently exceeding 70% week after week.”
Going back to the J.D. Power report, despite the plateauing in overall sales, mainstream segment auction sales the week ending Aug. 16 were up 3% over the prior week, report, including significant gains for large cars (up 11%), small cars (up 8%) and midsize pickups (up 7%).
Large SUV sales were off 4% and midsize SUV sales fell 5%, with sales for rest of the group steady to slightly up, J.D. Power said.
Among premium segments, auction sales volume fell 4%. There were two outliers: the large premium segment, where sales were up 18%, and small premium, where sales were up 1%.
The most significant drop was for the midsize premium SUV (down 13%), according to the report.
