Cox Enterprises Inc.
Jul 9, 2018
ATLANTA, July 9, 2018 /PRNewswire/ -- Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) defied expectations by increasing 0.53 percent month-over-month in June. This brought Cox Automotive's Manheim Used Vehicle Value Index to 134.9, a 4.3 percent increase from a year ago and its highest level since last October.
"We typically anticipate some softening in the market during the spring and summer months, but an unexpected bump in the last two weeks of June brought the second quarter to a stronger close than we anticipated," said Jonathan Smoke, chief economist for Cox Automotive, parent company of Manheim. "The recent increase in sales helped the market regain ground in terms of keeping price performance ahead of 2017 numbers. Used-vehicle prices remain higher now compared to where they were at the beginning of any of the last three years."
U.S. Vehicle Sales
According to Cox Automotive estimates, used-vehicle sales volume increased by 2 percent year-over-year in June with an estimated 39.8 million seasonally adjusted annual rate (SAAR), which is up on a month-over-month basis.
Strong used-vehicle demand is helping boost wholesale prices as dealers aggressively search for inventory, possibly in anticipation of future price pressure driven in part by higher interest rates and the potential impact of tariffs on new cars and new-car parts. With new-vehicle affordability challenged, used vehicles are often a smart alternative by consumers. Even the compact-car segment has shown strength, likely an affordability play by dealers aiming to please price-conscious shoppers.
New-vehicle sales continue to perform above forecast with a 5 percent year-over-year increase in June, which can primarily be attributed to strong fleet sales. Retail sales were mostly flat through the first half of the year and supported by healthy incentives, which are up 6 percent on a year-over-year basis. The new-vehicle SAAR in June came in at 17.4 million, up from last year's pace of 16.6 million. Cars continue to see sharp declines; sales in June fell 7 percent compared to last year. Light trucks outperformed cars in June and were up 12 percent year-over-year. New-vehicle inventories came in under 4 million units for the second consecutive month.
Used-Vehicle Pricing Segments
With the exception of luxury cars, all major market segments saw year-over-year gains, with the industry recording a 4.3 percent year-over-year increase for June. Second quarter wholesale price trends for individual segments included:
Rental-risk pricing was up 7 percent year-over-year and down 1 percent compared to May. Average mileage for rental risk units in June, at 42,700 miles, was up 5 percent compared to a year ago but down 1 percent month-over-month.
The U.S. economy grew 2 percent in the first quarter, which was a bit softer than expected. The second quarter will see a strong rebound and will likely hit the peak in economic growth for the year. Consumer confidence remains higher than last year and near a 17-year high despite a decrease in June as optimism about the economy and income growth declined.
To download additional commentary on Cox Automotive's Manheim Used Vehicle Value Index, visit the Learning Center.
Manheim® is North America's leading provider of end-to-end wholesale solutions that help dealer and commercial clients increase profits in their used vehicle operations. Through its physical, mobile and digital sales network, Manheim offers services for inventory management, buying and selling, floor planning, logistics, assurance and reconditioning. With its omni-channel approach, Manheim Marketplace enables wholesale vehicle clients more efficient ways to connect and transact business how and when they want. Approximately 18,000 team members help Manheim offers 8 million used vehicles annually, facilitating transactions representing nearly $58 billion in value. Headquartered in Atlanta, Manheim North America is a Cox Automotive™ brand. For more information, visit http://press.manheim.com.
About Cox Automotive
Cox Automotive Inc. makes buying, selling and owning cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader®, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com
SOURCE Cox Automotive
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