ATLANTA -

With wholesale supplies still being pinched by factors dealers are well aware of, the Manheim Used Vehicle Value Index moved down only marginally in October.

Manheim revealed Monday that wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) ticked lower from both the previous month and the year-ago level. The October index reading of 122.8 represented a 0.1-percent decline from both September and October of last year.

“Wholesale used vehicle values have remained at high levels due to restricted wholesale supplies and strengthening retail demand,” Manheim chief economist Tom Webb explained.

“In addition, the new-vehicle market continues to experience low inventory levels, higher transaction prices and a quicker sales pace,” he added.

A breakdown by vehicle segment showed how the overall index reading was nearly flat year-over-year.

Manheim indicated three vehicles segments made price gains since October of last year. That group included compact cars (up 6.1 percent), midsize cars (up 5.2 percent) and vans (up 1.3 percent).

Offsetting these advances were three vehicles segments Manheim said moved down year-over-year. That cluster included SUV/CUV (down 4.5 percent), luxury cars (down 2.7 percent) and pickups (down 0.3 percent).

Movement of Off-Rental Units

Webb pointed out off-rental units continued to command strong prices at auction.

Manheim discovered rental risk volumes in October moved down sequentially from September, but were well above year-ago levels.

“Pricing remained exceptionally strong, moving back above $14,000 per unit, and average mileage remained steady at about 37,500 miles,” Webb highlighted.

“The pricing on these units was no doubt helped by the low level of carryover units in new-vehicle inventory,” he continued.

Commercial Fleet Discussion

Webb acknowledged commercial fleets demonstrated mixed results. He noted they increased the volume of midsize cars returning to the market in October and achieved “fairly good” prices.

“But they were not commensurate with the lower mileage that these vehicles had at time of sale,” he surmised. “Pricing for end-of-service pickups and vans, however, continued to be very strong.”

Recapping Strong Used Sales Performance

As previously reported by Auto Remarketing, Webb reiterated CNW Research data that indicated used sales had their strongest October in four years with a year-over-year increase of more than 12 percent.

“As often noted, new- and used-vehicle sales are more complements than substitutes,” Webb stated.

“As such, it is not surprising that retail sales of used vehicles also strengthened in October,” he continued.

Webb also pointed out that third-quarter earnings releases from the seven publicly traded dealership groups revealed an increase in same-store used vehicle retail unit sales for the ninth consecutive quarter.

“Although they also reported a narrowing in gross margins, this was mostly likely the result of accepting low grosses on units that would otherwise have been wholesaled as opposed to any across-the-board reduction in gross profit per deal,” Webb explained.

A Deeper Look at New-Vehicle Sales

Webb’s commentary about the latest Manheim Index also touched on new-vehicle sales, which reached a seasonally adjusted annual rate of 13.2 million in October. Webb said that was the second-fastest pace of the year.

“And the gain was achieved without the much-feared incentive war,” Webb stressed.

“In fact, incentive spending was down as overall inventory levels remained low and carryover stock was a non-issue,” he continued.

“The high portion of October sales accounted for by 2012 models, and less discounting overall, meant that average new-vehicle transaction prices continued to rise nicely,” he concluded.