BANDON, Ore. -

Dealers continue to tussle with used inventory challenges, but they appeared to be getting a bit of relief in September, particularly for Big 3 and Asian brand vehicles.

CNW Research said in its latest Retail Automotive Summary that used-vehicle supply is estimated to be 43.57 days, compared to the level at the end of August (42.4 days).

However, there is some discrepancy between U.S., Asian and European models, CNW indicated.

“With more trade-in inventory, Detroit and Asian brands are beginning to be flush with products, pushing up the days’ supply into the mid-40 range,” said CNW president Art Spinella.

“European brand dealers, on the other hand, are beginning to shed inventory as many used-car buyers look for deals on five- to seven-year-old medium- and high-line models,” he added.

Despite overall used inventory climbing a bit in September, supply is down dramatically from prior highs in recent years. Consider the following chart from CNW:

Supply levels hit the 80–90 day level in late 2008, but for the most part have trended downward, as CNW’s data indicated. Today’s levels are down even when compared to the beginning of last year.

After falling to the 40-day realm late in 2009, used supply bounced back up to the mid 50s early last year and then hit near that mark again months later, but have crept back down into the low 40s.

Breaking it down by segment, there is less discrepancy between car and truck supply as there was previously.

“The gap between cars and trucks continues to narrow. Of the 43.57 days’ supply, trucks are at 107 percent of average while cars are at 93.2 percent,” Spinella indicated.

In January, trucks were 94.95 percent and cars came in at 105.6 percent. But by June, that gap had spread. Trucks peaked at a level between 120–125 percent of the average and — that same month — cars hit a trough lower than 85 percent of the average, as the following chart indicates.

Used Sales

When it comes to used sales, it appears dealers may see a nice lift for this month, with both franchised and independent stores expected to notch double-digit gains.

More specifically, CNW projects about 3.39 million used sales in September, up 9.8 percent year-over-year, “lifting the full-year improvement to 4.6 percent.”

Franchised dealers, in particular, are expected to see used sales total 1.27 million units for an 18.8-percent gain, while independents will likely move 1.26 million vehicles for a 12.7-percent hike.

However, CNW foresees private-party sales declining between 4 and 5 percent and coming in at 860,000 units.

Sharing some perspective on different vehicle segments, CNW offered the following chart illustrating used market shares for the various categories.



As the data indicates, small cars comprise nearly 24 percent of the used market, with SUV/crossovers next in line at a little more than 21 percent.

“If the new-car market is showing a reluctance to buy small cars, it‘s the opposite for used,” Spinella said. “In September, nearly a quarter of all used cars were small, which includes both economy and budget models.

“That‘s nine points higher than the same month a year ago and up from August,” he continued.

The “all other” category generated almost a 21-percent share, while the standard car was next with 14.28 percent of the market.

Providing more overall context, Spinella added: “Used buyers are indeed looking for fuel economy first and foremost. Unlike new-car buyers, generally, emotion plays little role in product selection. Budget, payments and necessity for transportation rule.”

Used Pricing

While sales and supply are moving northward, retail pricing is a different story, at least on a month-over-month basis, CNW noted.

For franchised dealers, asking prices for September are estimated at $11,253, which is up 1.12 percent year-over-year but down 1.79 percent from August.

Transaction prices for franchised dealers in September are estimated at $10,807, up 4.29 percent year-over-year and down 1.94 percent month-over-month.

Among independents, this month’s asking prices are estimated at $10,219, an increase of 7.39 percent from September 2010 and a 0.46-percent uptick sequentially.

Transaction prices for these dealers are projected at $9,572, an 11.25-percent uptick from September 2010 and down 0.27 percent month-over-month.