Tom Webb: September Ushers In Stabilization
After five straight months of decline, the Manheim Used Vehicle Value Index remained level with August’s reading of 120.7, which was indicative of the overall stabilization in wholesale used vehicle prices.
September’s wholesale stabilization reflected strong underlying dealer demand created by higher retail sales volumes. Shifting conversion rates suggest that the realignment in wholesale pricing has not yet fully played out, but that the marketplace maintains the flexibility to make needed adjustments without being disruptive to either buyers or sellers.
While "stabilization" was the word on the wholesale side, another "s" word is more appropriate on the retail side: stellar. New cars and light-duty trucks sold at a much-better-than-expected 14.9 million seasonally adjusted annual rate in September. Total used vehicle retail sales were up 6 percent in September, with dealers posting an even stronger 13 percent gain, according to CNW.
Middle price tiers (vehicles in the $8,000 to $11,000 price range) saw the strongest bidding. Higher-priced units, which are generally newer model units, showed some weakness. But, generally, that was related to specific models where the manufacturer had special model-year closeout programs in effect.
Tom Webb is Chief Economist for Manheim Consulting. Contact him at Thomas.webb@manheim.com, follow him via Twitter at www.twitter.com/TomWebb_Manheim and read his blog at www.manheimconsulting.typepad.com.
