CPO Sales Bounce Back

After October marked the first year-over-year dip in certified pre-owned sales in three months, the CPO market moved back into the black during November, posting a 9-percent improvement over the year-ago period and keeping the year-to-date pace well ahead of 2010.
Although CPO sales fell 1.2 percent sequentially, they climbed from 126,519 units sold in November 2010 to 137,850 certified sales last month, according to Autodata Corp.
This pushed the year-to-date total to 1.58 million, a 5.7-percent hike compared to the same period of 2010.
Amid this robust market, several automakers shared with Auto Remarketing how they achieved such strong months while also revealing what they see for the close of 2011.
One of those automakers was Kia, which notched yet another best-ever mark for CPO sales, moving 1,211 units. This marked a 111-percent improvement over November 2010 and pushed the year-to-date sum to 8,763 CPO sales (up 35.2 percent).
“Kia dealers are benefiting from increased auction inventory as the daily rental companies begin to de-fleet model-year 2011s for the new model-years 2012s,” said David Carp, director of fleet and remarketing at Kia Motors America
“We are confident we will break the 10,000-unit mark for 2011, which will mark five consecutive months of all-time CPO records at Kia,” he added.
Volkswagen — which already bested 2010 full-year sales months ago — achieved a 16.1-percent hike for November CPO sales (5,339 units), and its year-to-date sales have jumped 32.8 percent at 66, 827units sold.
In order to generate the inventory needed to achieve such strong gains, VW has turned to a new sourcing technique in the fourth quarter, and it appears the strategy is working, says general manager of pre-owned operations Scott Weitzman.
“VW had another strong month in CPO. We exceeded the 2010 total-year numbers back in September and our internal goals in October. Our dealers are more engaged than they have ever been and are generating record profits in the used-car arena,” Weitzman noted.
“We initiated a VW-backed trade-in program for the fourth quarter and have seen a significant influx of certifiable cars traded in by consumers since October. In fact, more than 1,500 CPO-eligible units have been traded in on dealer lots since October,” he continued.
“All of these units were pulled ahead from 2012 and beyond, when the lease or contract expiration would have normally occurred. Customers were offered $500 toward the purchase of a new VW if they traded-in early,” Weitzman added.
Over at Toyota, its dealers sold 24,912 CPO rides, up slightly from 24,710 certified sales in November 2010. Year-to-date sales have reached 302,742 units, compared to 288,239 CPO sales in the year-ago period.
Toyota anticipates 2011 will end up being its strongest year ever for CPO.
“Through November, we have surpassed 300,000 TCUV sales for a second year in a row,” said Brad Heagy, retail sales and operations manager for TCUV/TRAC.
“Given our strong dealership business partner commitments to the TCUV brand, we anticipate continued sales momentum through December to finish the year more than 10,000 units above last year’s best-ever sales record of 315,440,” he continued.
Heagy added that the 2.9 percent APR /60-month TCUV financing offer will continue through Jan. 3.
Mercedes-Benz moved 5,530 certified vehicles in November, which was down 11.9 percent year-over-year. Sales in the first 11 months of the year totaled 68,459 units for a 7.9-percent decline.
However, management praised the dealer network for the efforts in sourcing CPO-worthy inventory in a tough environment and for beating retail expectations, noting that 2011 will likely finish with a “strong close.”
“The Mercedes-Benz dealer network has exceeded retail expectations all year and we are forecasting a strong close to 2011,” said Scott Penza, manager of pre-owned operations at Mercedes-Benz USA. “It had been a challenge all year to source used cars, but our dealers were successful using some creative methods and effectively managing inventory.”
Lexus, meanwhile, achieved its second best November on record, selling 5,133 certified vehicles, which was down 1.9 percent from a year ago, the best-ever November for Lexus . On a year-to-date basis, CPO sales have climbed 3.2 percent to 63,201 units.
Moving along, Hyundai notched its strongest November ever with 4,825 CPO sales, which was up from 2,066 sales a year ago. This also represented the third-best CPO month the brand has recorded.
Through 11 months, Hyundai has moved 43,311 certified vehicles, compared to 20,414 in the same period of 2010.
On the domestic side, Ford moved 10,917 certified vehicles in November for a 10-percent gain; and year-to-date sales stood at 118,471 units, a 3-percent decrease.
By division, the Ford brand’s CPO sales came in at 9,007 units last month, an 8.1-percent gain. Lincoln/Mercury CPO sales were at 1,910, a 19.6-percent gain.
Certified sales for General Motors dealers came in at 24,872 units in November, up 14 percent year-over-year. Year-to-date sales are at 281,368 units, a gain of 3 percent.
“We’re on track to end the year with a portfolio of wins, from sales increases to increased dealer engagement,” stated Larry Pryg, GM’s national manager of certified pre-owned vehicles. “Our new program benefits, including an industry-exclusive maintenance plan, have helped us to gain momentum throughout 2011 and offer dealers reasons to join the program and customers reasons to choose our brand.”
Meanwhile, Chrysler posted 9,453 certified sales in November (up 10.2 percent), and its yearly sales have reached 104,620 units for a 6.5-percent hike.
Leading the way in November was Dodge, which moved 4,048 CPO cars for a 27.9-percent hike. The Jeep brand sold 3,473 CPO units (up 11.3 percent), and the Chrysler brand moved 1,932 vehicles (down 15.7 percent).
Continuing on to Volvo, dealers there moved 1,062 CPO vehicles in November, compared to 1,124 certified sales a year ago. Through 11 months, Volvo has posted 11,811 CPO sales, down from 15,963 sales in the year-ago period.
At Audi, its November CPO sales came in at 2,688 units, a 21-percent gain. Through 11 months, certified sales have totaled 33,853 vehicles, a 32-percent hike.
BMW moved 5,867 certified units in November (down 27.8 percent), and its sales for 2011 have reached 76,634 units (down 25.2 percent).
"For November, we introduced for the first time zero-percent financing, albeit for a 24-month term, to give our dealers a good communication message, along with more aggressive rates for longer terms. For December, we added a ‘two-payment program,’ where we will make the customers first two payments on any 2008 model-year CPO financed through BMW FS," said Stephen Saward, manager of pre-owned sales and corporate fleet at BMW of North America.
"It is part of our efforts to make the transition from 2008 to 2009 inventory, as our off-lease portfolio transitions to a majority of 2009 products," he continued.
"Dealers continue to be creative at sourcing inventory for their used car departments but in some cases the high prices of used cars and competitive offers on new cars are leading some dealers to certify fewer cars, and instead sell them as ‘used cars,’ as a way to control pricing and maintain a sufficient distance from new car prices," Saward added.
Moving along, the Honda brand’s CPO sales hit 18,249 units in November (up 19.1 percent), pushing its year-to-date sum to 207,706 certified sales (up 11.6 percent). Acura achieved 3,418 CPO sales (down 4.4 percent) and is up 7.7 percent on the year with 44,009 certified units sold.
Over at Nissan North America, the Nissan division had CPO sales of 7,806 units (up 26.8 percent), with the Infiniti division climbing 15.4 percent to 1,091 certified sales.
Year-to-date, Nissan is at 83,409 CPO sales (up 12 percent), and Infiniti is at 12,038 sales (up 14.1 percent).
Next up, Mazda’s 1,638 certified sales in November were a 21.3-percent uptick, and its year-to-date sum of 17,131 sales is a 91.2-percent hike.
Subaru sold 2,101 certified vehicles last month, compared to 1,966 CPO sales in November 2010. It has moved 21,840 CPO cars this year, up from 18,683 certified sales in the same period of 2010.
"I think we can finish the year at around 24,000 CPO sales which has been our goal and would be a 20-percent increase YOY," said Subaru’s Jim Sarchese. "Inventory continues to be the chief headwind but indicators are starting to show it loosening up a bit and improving slightly by the end of the first quarter 2012."
Among other automakers, Saab sold 27 certified cars, down from 166 CPO units a year ago.
Jaguar’s certified sales were at 300 for November, compared to 323 sales a year ago, while Land Rover posted 657 CPO sales, up from 201 in November 2010.
Mini’s CPO sales were at 151 units, up from 144 in November 2010. Porsche posted 556 certified sales, down 13.7 percent year-over-year.
There were 38 certified Maserati vehicles sold, up from 17 last year. Mitsubishi’s certified sales reached 23 units, down from 46.
Bentley was estimated to have sold 30 units.