• DD-Square-Logo_resized
  • ATTEND LAS VEGAS
    • Attendee
      • Registration & Pricing
      • Agenda Summary
      • Hotel & Travel
      • FAQ
    • Exhibitor
      • Exhibit/Sponsor
      • Advertising Opportunities
      • Exhibitor Console
    • Education
      • Overview
      • Show Schedule
  • ABOUT
    • Conference Overview
    • Testimonials
    • Become a Speaker
    • Press Inquiries
    • Partnership Programs
    • Health & Safety
    • Contact Us
    • Get Updates
  • RESOURCES
    • Webinars
    • Downloads
  • NEWS
    • Auto Retail News
    • Digital Editions
    • Press Releases
    • Submit Editorial
    • Subscribe
  • .
  • ATTEND LAS VEGAS
    • Attendee
      • Registration & Pricing
      • Agenda Summary
      • Show Schedule
      • Hosted Dealer Program
      • Hotel & Travel
      • FAQ
    • Exhibitor
      • Exhibit/Sponsor
      • Advertising Opportunities
      • Exhibitor Console
      • Exhibitor Services Manual
    • Education
      • Conference Overview
      • Conference Speakers
      • Session Schedule
  • RESOURCES
    • Webinars
    • Downloads
  • ABOUT
    • Conference Overview
    • Testimonials
    • Become a Speaker
    • Press Inquiries
    • Partnership Programs
    • Health & Safety
    • Get Updates
  • NEWS
    • AUTO RETAIL NEWS
    • PRESS RELEASES
    • DIGITAL EDITIIONS
    • SUBMIT EDITORIAL
    • SUBSCRIBE

Las Vegas: Oct 17-19, 2023

REGISTER NOW EXHIBIT / INQUIRE
Q

NEWS:

Pre-Owned Sales & Marketing Strategies
August 3, 2012

Kbb.com: High Used-Car Values Contribute Heavily to Higher Demand for New Vehicles

Posts:
Pre-Owned Sales & Marketing Strategies
August 3, 2012

Kbb.com: High Used-Car Values Contribute Heavily to Higher Demand for New Vehicles

According to Alec Gutierrez, senior market analyst of Automotive Insights for Kelley Blue Book, with some one- and two-year-old used vehicles commanding as much as 90% of original MSRP, many consumers have opted to purchase a new vehicle rather than used.  In some cases, a new vehicle actually is a more affordable proposition than an equivalent one- or two-year-old model, due to more attractive finance offers and lease opportunities for new vehicles.

This phenomenon likely only will last through the end of the year.  In fact, used-vehicle values declined 2.3% in July alone, and currently they are down close to 6% year-over-year.  As used-vehicle supply improves in 2013, Kelley Blue Book expects to see the gap between late-model used vehicles and new-car transaction prices widen.  This should prompt many buyers to look to used cars as a viable replacement, putting an additional burden on manufacturers to rely on incentives to make up for potentially reduced demand next year.

July Sales Hold Steady Despite Slowing Economic Growth

With most major manufacturers reporting July results so far, it appears as though auto industry sales will fall shy of 14 million SAAR for only the second time this year.  Although down slightly from the 14.3 million SAAR averaged through the first six months of 2012, sales remain on track to hit Kelley Blue Book’s forecast of 14.2 million for the year, an 11 percent improvement over 2011.

Weak economic headlines have done little to keep shoppers away from dealerships, although stalled job growth and wavering consumer confidence could slow sales growth in the near term.  New-vehicle sales growth has been somewhat anomalous this year considering persistently low consumer confidence and an unemployment rate that remains above 8 percent.  In fact, since 1976, new-vehicle sales have averaged just shy of 12 million units in any years where the unemployment rate averaged 8 percent or higher, giving a strong indication that sales in 2012 have been driven in large part by pent-up demand.  While demand is still playing a significant role in driving vehicle sales, it cannot carry industry growth indefinitely.

Industry Sales Growth Slowing as Economy Stalls

With domestic sales relatively flat in July and Japanese manufacturers only showing strong gains due to weak sales last year, we may be at a point where sales growth stagnates.  Although manufacturers like Hyundai, Volkswagen and Subaru continue to post double-digit gains, they may be stealing share from traditional heavyweights and redistributing sales rather than generating new sales growth.

Sales have been steady in the low 14 million unit SAAR range over the past several months and with economic growth slowing, sales growth will likely level off.  That being said, manufacturers will need to get creative to keep sales momentum moving forward.  Interest rates already are as low as they can go, and increasing incentives only benefits sales in the short term at the expense of residual values.  They also limit the ability of manufacturers to offer competitive leases in the future.

Comments by: Alec Gutierrez, senior market analyst of Automotive Insights for Kelley Blue Book

Pre-Owned Sales & Marketing Strategies

SHARE

Share on Email
Share on Linkedin
Share on Facebook
Share on Pinterest
Share on Twitter
← Previous Article Next Article →
Posts Industry Press Releases

Focus Advisors Represents Vinart Dealerships in their Body Shop Sale and Services Agreement

Posts Sales & Variable OpsTrending Industry News

The Power of Transparency in Used Vehicle Sales

Posts Industry Press Releases

Focus Advisors Represents Vinart Dealerships in their Body Shop Sale and Services Agreement

Posts Marketing & AdvertisingTrending Industry News

How Digital Marketing Propels the New Way to Sell Cars

Posts Dealer Ops & LeadershipTrending Industry News

Standing Too Close to the Elephant

Posts Sales & Variable OpsTrending Industry News

Enhancing and Transforming the Automotive Sales/Service/Parts Lifecycle with ChatGPT

Posts Dealer Ops & LeadershipTrending Industry News

Four Steps for Successful Digital Retail Adoption

Posts Dealer Ops & LeadershipTrending Industry News

The Who, What, Where and How of AI-Built Solutions

NEWSLETTER

SUBSCRIBE

DEALER MAGAZINE

Dealer Magazine March/April 2023 Issue Featuring an Interview with NADA 2023 Chairman
MAGAZINE
Digital Dealer Logo White
FOLLOW US ON
  • Follow
  • Follow
  • Follow
  • Follow
  • Follow
© 2023 Emerald X, LLC. All Rights Reserved.
ABOUT    CAREERS    AUTHORIZED SERVICE PROVIDERS    TERMS OF USE    PRIVACY POLICY