BANDON, Ore. -

Along with some survey discussion about brand appeal and what technology consumers want in their vehicles nowadays, CNW Research expects the April used-vehicle sales total to jump 10 percent.

President Art Spinella also predicted retail prices should edge upward because of short supply.

Overall, CNW thinks April’s used-vehicle sales total could reach 3.6 million. The figure for the same month a year ago was 3.286 million.

In his monthly industry briefing, Spinella noted franchised dealers are already showing nearly an 8-percent increase in April used-vehicle sales. He thinks that gain could come in higher as the month progresses with fresh trade-ins.

Meanwhile, CNW noticed that sales activity at independents dealers is up more than 15 percent this month.

The last segment that’s expected to push April used-vehicle sales up by double digits are private-party transactions, which CNW believes are ahead of the pace set in the same month a year ago by 6 percent.

Spinella pointed out that the bright April outlook comes after March that is typically a strong month for used sales at franchised dealers. Last month, CNW determined franchise dealers sold an average of 57 used vehicles per outlet, up 5.4 percent compared to the 54 units sold per outlet a year ago.

“March represented the best monthly unit number in at least four years,” declared Spinella, who added that the willingness of finance companies to provide loans to a deeper pool of potential buyers aided the gain.

Spinella offered more commentary about the trends by noting, "The industry is reaching the point where newer used cars are beginning to encroach on the price of new cars.”

The CNW president believes this situation causes two effects. The condition creates a cap on how much higher retail used-vehicle prices can go and simultaneously it can diminish the need for new-vehicle incentives.

Whether it’s a franchise or independent store or a private-party transaction, CNW thinks online used-vehicle sales are on the way up, too.

CNW calculated that used-vehicle sales conducted online climbed nearly 10 percent in the first 10 days of April versus the full-month total for April of last year.

The firm determined better than 26 percent of all vehicles on the Internet are selling within a 45-day period.

“April should see about 71 percent of all used vehicles being offered on some Internet site,” Spinella surmised.

CNW Analyzes Used-Vehicle Supply Trends

After discussing retail sales forecasts, CNW moved over to how used-vehicle supply levels are behaving.

“As the used-car market continues to heat up, the number of vehicles available for sale edges down,” Spinella began.

CNW indicated early April data suggests that for the full month, days’ supply of used vehicles will fall to 47.55 days compared with 48.27 days in March and 51.6 days in April of last year.

“While historically the ideal supply was measured around 45 days, the reality is most used-car outlets — either franchised or independent — need 55-plus to provide the selection customers require,” Spinella explained.

“In normal conditions, 47 days would be only a minor strain, but with consumers quickly shifting desire to high-mileage passenger cars, dealers are finding their supply seriously strained,” he continued.

More specifically, CNW pinpointed that days’ supply of small cars now rests below 40, half of what it was nine months ago and 10 days fewer as recently as January.

“The availability of smaller, fuel-efficient cars will cause some turmoil in both auction lanes and among independent dealers,” Spinella predicted.

“New-car dealers are already sucking up fuel-efficient trade-ins for their own lots, averaging nearly twice the selling price than the amount paid for it at trade,” he continued.

In mentioning one specific model as an example, Spinella described Honda Civics as “hotter than hot.”

He went on to say “This unusual demand will force many owners of these cars to offer them private party, which in turn will drive up the price dealers are willing to pay. Down the line, it will mean even better margins on new small-car variants as discounts become rare.”

What If Another Brand Went Away?

As industry followers already know, brands such as Saturn, Pontiac and Mercury all have been phased out in the past couple of years. In both 2008 and 2010, CNW asked current owners of various brands if they would miss that nameplate if it were to disappear.

In both years, domestic brands didn’t make the top five. In 2008, the top five brands included Porsche car, BMW car, Porsche truck, Mercedes car, Honda car. Results from last year’s survey that recently came out showed the top five were the same contingent.

Reflecting a decision made by the automaker, CNW found in both years that owners wouldn’t miss the Mercury car or truck brand. While Hyundai’s brand connection strengthened with consumers, CNW also found they aren’t as bonded to sister brand Kia

“There is clearly a link between customer willingness to buy the same brand again (loyalty) and the attitude about the potential loss of that brand from the marketplace,” Spinella explained. “An improvement is encouraging, a decline in percentage a cornerstone of looking hard at the brand’s image.”

To illustrate these assertions, Spinella turned a focus on some of the most popular nameplates — Ford, Toyota, Nissan, Honda and Acura.

“While Ford, Honda and Nissan have all registered improvement in the percent of current owners who say they would miss the brand if it were gone, Toyota has slipped slightly and Acura has suffered a major plunge,” Spinella noted.

“In Ford’s case, the percentage increases have been fairly consistent and over a longer period of time — since 2004’s study,” he continued.

“Toyota, on the other hand, while still boasting a high loyalty number, has seen the third study-to-study decline and, simultaneously, has found itself in the position of actually having to spend increasing dollars on incentives,” Spinella went on to say. “Honda’s numbers are statistically unchanged. While the brand has other problems — not the least of which is an aging owner base — the core loyalty remains strong.”

No matter the automaker, Spinella emphasized that “loyalty of current owners and the ability to draw fresh blood to the brand have to be in balance.”

CNW stated the next segment of its ongoing study will be conducted later this year to see how new models and improved economy impact the industry.

Vehicle Electronics Continue to Gain Appeal

Since 2006, CNW discovered surveyed consumers have been steadily changing their opinions on the importance of electronics in vehicles. Cutting-edge sound systems and entertainment centers with the capability to connect with iPods along with navigations systems are continuing to be quite desirable to buyers.

Sounds systems continue to rank highest with more than 80 percent of those questioned placing that amenity first, but iPod connectivity has more than doubled in the last three years.

“What’s intriguing about the numbers is that it is demographically blind. That is, both younger and older shoppers are virtually identical in their demand for electronic in-car devices,” Spinella shared.

“While it may add to the complexity of vehicle production and potential hardware/software glitches, there’s no way automakers can avoid the desires of customers,” he continued.

Are consumers willing to pay for the goodies? CNW thinks they are.

On vehicles ordered through dealerships for personal-use customers, CNW’s survey found 86 percent add some form of upscale electronic systems, including sound systems.