Black Book: Dealers See Difficult New & Used Retail Conditions
Black Book’s Ricky Beggs spotted common themes when reviewing report summaries from personnel who attended auctions throughout the country last week.
He indicated several dealers called the new-vehicle market “slow” and a “tough sell.” And a little more vital to the used-car department, Beggs shared that some dealers are saying “used buyers were a little concerned about the current market conditions.”
The Black Book managing editor continued in his latest video report, “Beggs on the Used Car Market” by acknowledging “with the economic issues still prevalent, uncertainty should be the norm right now.
“At least gas prices at the pump continue to ease downward,” he added.
After summarizing what dealers told Black Book, Beggs mentioned the wholesale market continues to move “as expected,” making room for 2012 models.
“We are making the most adjustments on the 2011 and 2010 models where there will be a variance in the retail monthly payment as compared to the new carryover 2011s and the coming 2012s,” Beggs explained.
Black Book discovered the percentage of increases it made last week was just 10 percent. The firm recollected it hadn’t seen a level of total changes that low since Nov. 12.
Last week’s overall change was a downward push of $118, what Beggs said was on par with the previous three weeks. Black Book averaged almost 2,100 adjustments per day.
Beggs went on to note that cars and trucks have traded places each of the past five weeks in posting the greatest segment decline. Last week, however, Black Book found cars and trucks sunk at almost the same rate, with trucks sliding down $42 and cars slipping $41.
Discussing cars specifically, Beggs pointed out all 10 car segments dropped for the fourth week in a row. Pacing the downward moves were prestige luxury cars (off by $61) and premium sporty cars (off by $82).
While still ticking down $9, Beggs noticed the relative strength of full-size cars, models such as the Chrysler 300, Ford Five Hundred, Chevrolet Impala and Toyota Avalon.
“The near luxury cars including the (Audi) A4, BMW 3 Series, the (Cadillac) CTS and the (Mercedes-Benz) C-Class were mostly solid as well, only declining $10 over the week,” Beggs surmised.
A $19 gain by full-size cargo vans kept Black Book from recording declines in all 24 vehicle segments it tracks. Within the truck contingent, two particular model types declined much greater than the segment average. Those were full-size crossovers — which improved previously but sunk $140 last week — and midsize crossovers — which sunk by $90.
“Although we had a decline of $8 in the full-size SUVs this past week, they have been pretty stable in relation to most of the models over the past two weeks,” Beggs indicated.
“Tracking back month over month while looking at some three-year-old models, the full-size SUVs are holding on well being stronger today than a month ago,” he went on to say. “Quarter-over-quarter trends give us four segment types still doing better today. A more amazing trend is that there are six segment types that are stronger in year-over-year comparison."
Moving along, while studying the auction data, Black Book determined there was an ample supply of some 2011 models that enabled analysts to include the initial market driven values.
“Some of those were the Dakota pickup, which had its final model produced this week, to the Highlander, Kia Forte, some Silverado pickups and a BMW 5 Series, to name a few,” Beggs shared.
“All total there were 14 different models with their first market driven values,” he added.
Beggs also touched on some Black Book user feedback in his latest video report.
“Occasionally we get calls or emails with various questions regarding a service or product, a used price on a vehicle, some trends on a segment and even questions about new vehicles and residual projections,” Beggs recounted.
“Within our new car team, led by Theresa Barnes, we create and provide both printed and electronic versions covering nearly every new vehicle sold in the United States with MSRP and Invoice pricing, listings of standard equipment and specifications by model and trim level, as well as all optional equipment and package content,” Beggs reiterated.
Beggs noted the cover of the printed new Car Cost Guide, which is updated seven times each year, showcases a new or recently redesigned vehicle.
“In the May/June 2011 issue apparently we disguised the impressive BMW X5 and X6 models enough to get quite a number of calls asking what models were on the cover,” Beggs offered.
“Because of those calls, we are now including the name of the highlighted model, as you can see from this month’s cover of the new Dodge Durango,” he noted.
“If you have a need for complete new car information or new vehicle residual value projections, please give us a call. And we now also identify the vehicle on the cover for you, since you asked,” Beggs went on to say.
The Black Book managing editor wrapped up his report by mentioning how Labor Day is fast approaching.
“The final holiday and the unofficial end of the summer, and also the start of college football season, all arrive next week,” Beggs stressed.
“Even with the holiday, we will post the most recent update on the specialty markets, the collectible cars, the motorcycles and powersports, the medium and heavy duty trucks and the recreational vehicles,” he indicated.
“Have a great week. We look forward to seeing you on the auction lanes,” Beggs added.
Beggs’ videos can be viewed here.