Dealers Hunt for Used Vehicles

First Up 09/12/23

Dealers Hunt for Used Vehicles

Dealers continue to watch auction values as they gauge whether it’s affordable to stock up on used vehicles. Publicly traded, new-vehicle dealership groups say they’re self-sourcing as many used vehicles as possible – that is, from trade-ins and buying vehicles off the street – to avoid auction prices they regard as still too high and still bring in the profits from used-car demand. That retail used-car revenue may change, as used-car values at wholesale auctions were down in August, making it 12 months in a row auction value fell vs. the same month a year ago, according to the latest Manheim Used Vehicle Value index. However, the rate of decline was smaller, compared with greater declines in fourth-quarter 2022 and into January 2023, and double-digit percent declines in June and July, according to the recently published index, reports Wards. By the numbers: the August Manheim Index was 212.2, a bare increase compared with July  at 211.7, but down 7.7 percent vs. August 2022. The corresponding seasonally adjusted average price was $19,412 in August, down from $21,039 a year ago, Manheim says. Click here for the full story.

Potential UAW Strike Could Cut Production, Push Up Vehicle Prices, Analysts Say

A prolonged coordinated strike by the United Auto Workers (UAW) union against the Detroit Three automakers could cut production by thousands, potentially pushing up vehicle prices and exacerbating supply-chain disruptions, analysts said. The auto industry is on edge as the current four-year contracts between the UAW and General Motors,  Ford Motor Co, and Stellantis  for hourly U.S. workers expire on midnight Sept. 14, after which the union's chief has warned of a possible coordinated strike, reports Reuters. New vehicle prices may rise by less than 2 percent if the strike lasts about two weeks, according to automotive consulting firm J.D. Power. "Everyone's going to see higher prices regardless of the company you buy from if it (strike) continues for more than two weeks," said Tyson Jominy, vice president, data and analytics at J.D. Power. He added that companies such as Toyota, Honda and Volkswagen may also benefit if the domestic brands quickly run out of inventory to sell. Jominy said the used car market, which quickly follows the underlying trends of the new market, may see a greater impact on prices if there are fewer substitutes for buying a vehicle. Click here for the full story.

Auto Loans More Available in August, But Credit Access Still Restricted

Auto loans were easier to obtain in August, according to the latest credit availability data from Cox Automotive. Overall loan access improved from July by 1.8 percent, pushing credit availability scores to their highest point since last November. However, access remains 2.8 percent more restricted than the previous August. Contributing to the month’s more flexible lending practices were narrower yield spreads and higher negative equity share, although longer average terms, fewer down payments and lower loan application approvals prevented a more substantial correction from occurring. Auto loan accessibility for certified pre-owned (CPO) vehicles improved the most from the prior month, while new cars saw restrictions tighten the most. Nevertheless, compared to August 2022, used vehicles have seen credit access worsen more than new or CPO, reports CBT News. The changes in August continue trends seen over the course of summer, with banks and lenders ending restrictive policies put in place earlier this year. While consumers were already struggling with lower auto loan availability as a consequence of the COVID-19 pandemic, the collapse of several U.S. banks in spring led many creditors to tighten access even more. Click here for the full story..

New BMW Windshield Technology Tackles Driver Distraction

When it comes to in-car digital displays, BMW thinks more isn't necessarily better. While automakers carpet vehicle dashboards with jumbo displays, the German luxury automaker is steering toward a less-distracting digital experience in its future electric vehicles, reports Automotive News. "Your car is your last private space," said Stephan Durach, BMW Group senior vice president for connected company development. "Sitting in front of a wall of screens is not a nice [customer experience]." So BMW is ditching its dashboard-riding slabs of curved glass for a less-intrusive driver experience in its Neue Klasse platform EVs that arrive mid-decade. "We looked at the [Mercedes] Hyperscreen, we looked at our own solutions," BMW Group Chief Technology Officer Frank Weber told Automotive News ahead of this month's Munich auto show. "We saw the limitation of bigger and bigger displays." Weber said the new concept merges physical and digital experiences. While BMW's redefined user experience doesn't reduce the number of screens in the vehicle, it sandboxes content to individual displays to minimize driver distraction. Interaction is handled via steering wheel control and voice commands. Click here for the full story.

Toyota Dealers Desperately Want a Small Pickup Truck

Since last year, Toyota USA has been closely monitoring the budding compact truck segment, currently populated by the hot-selling Ford Maverick and Hyundai Santa Fe. According to Carbuzz, Toyota dealers have been admiring these models from afar and have desperately wanted a compact pickup of their own for years now. Steve Gates, the current chairman of the Toyota National Dealer Council, said he's been asking for a compact Toyota pickup "since back in the Jim Press days." Jim Press was, of course, Toyota Motor North America's COO until 2007. Gates also owns a Ford dealership, witnessing first-hand how quickly the Maverick flies off dealer lots without affecting the sales of the Ranger and F-150. "The quality small truck is Toyota's DNA. We hear all the time, several times a week, stories of people who had older Toyota trucks, before those trucks even had a name, and they long for another small Toyota truck. I think the volume opportunity is huge, without affecting Tacoma and Tundra sales," Gates said. Apart from himself, other members of the dealer council's product committee share Gates' sentiments and have already submitted a formal request for a small Toyota truck. Click here for the full story.

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