According to the Blue Book Market Report for May 2012, new-car sales maintain momentum, post solid 14.4 million SAAR Pace. Click here to read the full results: Blue Book Market Report – May 2012.
THIS MONTH’S REPORT INCLUDES:
NEW-CAR MARKET ANALYSIS
- New-Car Sales Maintain Momentum, Post Solid 14.4 Million SAAR Pace
Pent-up demand stemming from the earthquake in Japan last year helped to kick off the year strong. At 14.4 million seasonally adjusted annual rate (SAAR) in April, it appears as though the industry is well on its way to surpass 14 million sales this year, due to a slow but steady improvement in the economy, better inventory conditions and a slew of new and redesigned introductions that continue to push the envelope in terms of quality and efficiency…
- Weak Job Growth Slows Current Pace of Auto Sales Recovery
Although Kelley Blue Book expects steady improvement in auto sales, there are risks that could slow the pace of current recovery. April’s weak job report casts doubt on the sustainability of a slow-paced economic upturn. While the unemployment rate dropped to 8.1 percent with only 115,000 jobs created, this is well shy of initial projections. Perhaps more troubling was a decline in the labor force participation rate…
- Another Parts Shortage Looming
While weaker than expected job growth could certainly curtail demand later in the year, a potential parts shortage stemming from a chemical plant explosion in Germany on March 31 could have more immediate and impactful effects on auto sales. When news of the plant shutdown first broke, automakers and suppliers reacted quickly by locating alternatives to PA-12 and CDT, two resins produced at the plant that account for as much as 25 and 70 percent of world supply respectively. At first, the impact seemed widespread. Now, a little more than 30 days later, manufacturers and suppliers are more upbeat…
- Where Will Fuel Prices Bottom?
Gas prices dropped $0.17 per gallon nationally since April 3, and in California, it fell nearly $0.20. In addition, May 8 oil prices came in below $97 per barrel for the first time since February due to a weaker than expected jobs report adding to a string of bad economic news in recent weeks. Fears of gas prices hitting $5.00 per gallon or more are quickly fading, as all indications point to $3.50 per gallon gas by year end. Fuel prices are already down to $3.74 per gallon nationally, $0.23 cheaper than one year ago. In 2011, fuel prices peaked in May at $3.97 per gallon before falling down to $3.20 per gallon by year end. Gas prices could repeat or surpass these lows once again this year…
- Sales Dip for Fuel Sippers on Gas Price Drop
Fuel-efficient subcompact, compact and hybrid cars accounted for 21.5 percent of all new vehicles sold in April; the lowest monthly share held by the segment since the start of the year. Interest waned for fuel-efficient vehicles last month, spurred by falling gas prices, a trend expected to continue in the months ahead. We saw a similar pattern in 2008 and 2011; the last time fuel prices approached $4.00 per gallon…
- Mid-Size Sedans Increase Lead
Mid-size sedans continued to dominate industry sales in April, accounting for 19.5 percent of all vehicles sold in the month. With attractive incentives, ample inventory and the availability of fresh new product, sales in this segment remain strong. The Honda Accord leap frogged the Nissan Altima while selling just 1,500 units shy of the Toyota Camry’s segment leading 36,820 unit sales…
- Detroit: The Come-Back City
General Motor’s market share bounced back to 18 percent in April, after dropping to 16.5 percent in March. Although GM regained share, they have maintained the lowest market share in more than five years during the first four months of 2012. Through April, GM held 17.7 percent market share, the lowest total since 2010 when they only accounted for 18.7 percent of all vehicles sold. Although market share has declined, GM’s North American operations posted a $1.7 billion profit in Q1, due in part to their reluctance to roll out heavy incentives to chase market share…
- Hyundai Continues Up Market Share Path
Hyundai has performed one of the most remarkable turnarounds in recent memory, finally emerging as a true player in the industry after years of less than 5 percent share. Hyundai has doubled their market share in the last five years, due in large part to the success of the Elantra and Sonata redesigns. The redesigned Azera should help keep things moving in the right direction; however, Hyundai’s biggest problem has been their inability to increase production to meet demand…
- Nissan Loses Share in April
Nissan’s market share dropped nearly 4 points in April after an extraordinarily strong March in which Nissan was able to capture 9.7 percent all sales, equal to their best performance in five years. Nissan typically surges in March through the use of heavy incentives to cap off their fiscal year with a strong finish…
USED-CAR MARKET ANALYSIS
- Want Bang for Your Buck? Buy a Saab!
Since declaring bankruptcy late last year, values of late model used Saab’s have been in free fall. The 2010 Saab 9-3 has declined by $4,500 since December, while the 2009 9-5 has dropped a comparable $3,800. Values have finally stabilized in recent weeks and are now at a point that might attract the right consumer. A 2010 Saab 9-3 can be had for about $14,250 according to the current Kelley Blue Book® Auction Value; a relative bargain compared to other vehicles available at the same price point…
- Fuel Prices Peak, Values of Gas-Sipping Used Vehicles Next
With gas prices on the way down, Kelley Blue Book expects values of used-subcompact, compact and hybrid cars to retreat from their current high. In most cases the declines will be mild and generally in line with seasonal depreciation. An average used-compact should decline no more than 1 to 2 percent per month through summer before leveling off sometime in Q4. The value of high demand fuel-sippers that have aggressively outpaced average market increases, such as the Toyota Prius, Kia Soul and Chevrolet Cruze, will likely exceed these declines…
- Five Vehicles at Risk for a Correction
Although declines in fuel-sipping compacts are likely to occur slowly during the next few months, Kelley Blue Book expects steeper declines for the vehicles that appreciated most since the start of the year. Of particular risk for correction are those vehicles that are currently selling at auction near manufacturer’s suggested retail price (MSRP)…
- Full-Size Trucks Take a Hit
Last month’s Blue Book Market Report anticipated slight declines for full-size trucks and sport utility vehicles during Q2, and so far truck values are performing as expected. Full-size pickup trucks fell by a scant 0.5 percent in April, while full-size SUVs dropped by a slightly more pronounced 1.7 percent. On a year-to-date basis, full-size pickups and SUVs remain up by 1.6 percent and 0.2 percent respectively. Values should remain stable and continue to suffer only modest declines as we move further into spring…
- Mid-Size Trucks and SUVs Remain Steady
While full-size trucks and SUVs were down slightly in April, mid-size pickups and SUVs saw comparatively little change. However, compared to this same time last year, values for mid-size pickups are 7.7 percent higher and mid-size SUVs are 8.8 percent higher than at the end of April 2011…
LATEST HOT USED-CAR REPORT
- Passing on Regular for Premium
In April, kbb.com shoppers shifted their interests from compacts and fuel savers to luxury vehicles and sports cars. Typically during the spring months shoppers gravitate toward sports cars and high-end vehicles, but with gas prices on a downward trend this activity has enhanced. The segment with the largest lift month-over-month is the high performance segment, increasing 13.9 percent. Driving interest to this segment is the Chevrolet Corvette, which accounts for 67 percent of segment traffic…
ALL-NEW ‘BLUE BOOK MINUTE’ VIDEO
In addition, this month we have created a video with Juan Flores, director of vehicle valuation for Kelley Blue Book, detailing the latest insights into the marketplace for May. To view the latest video, click here: http://mediaroom.kbb.com/blue-book-minute