Used-vehicle sales continue to outperform new-vehicle sales, as new car sales have dropped to a 42-year low, and retail used car sales are up 2.3 percent. That is according to Manheim Consulting's first-ever Mid-Year Used Car Market Report, which covers automotive industry trends that shaped the first half of 2009.
The new report builds on the reputation of Manheim's annual Used Car Market Report. The new Mid-Year Used Car Market Report is compiled by Manheim Consulting's chief economist Tom Webb and offers news and analysis to automotive industry analysts, media, dealers, institutional sellers and others with an interest in the wholesale automotive business.
The report includes chapters on dealers, rental, credit (leasing and finance), commercial and government fleets, salvage, and intelligent remarketing. The rental chapter reports that rental companies are extending service lives and are buying 39 percent fewer vehicles. A shift from program to risk vehicles is continuing, with 75 percent of rental purchases now risk vehicles.
The fleet section reports that fleets are being downsized, with smaller and more fuel-efficient models gaining popularity. Sales into non-rental fleets declined by 42 percent.
Other key points:
Dealers: Dealership closings impact the automotive value chain. "Buy-here, pay-here" demand remains strong, and fewer trade-ins (due to fewer new car sales) reduce wholesale supply.
Credit: The lending market slowly improves, while lease originations continue to tumble. Lending share is shrinking for captives and growing for credit unions and regional banks. New lease originations are expected to fall to 1.2 million in 2009.
Salvage: Salvage vehicle values are rising. The volume of salvage vehicles at auction declined slightly, while salvage values posted month-to-month gains with supply tighter.