February 3, 2014
www.usedcarnews.com
ON THE WEB: Young People Still Want Cars, Report Finds
Gen Y consumers are showing a clear interest in vehicle ownership and have specific ideas of what they want in a car, according to Deloitte LLP. Data from a Deloitte report shows that while young consumers view car ownership as less important than previous generations, they are, nonetheless, excited about affordable, technology-enabled vehicles – especially hybrid electric cars.
Digital Ads Influence Auto Shoppers
A new report finds that consumers are almost twice as likely to be swayed by autofocused digital marketing than the general population (21 percent vs. 12 percent).
Westlake Financial Sees Franchise Growth
Westlake Financial Services has seen an 84 percent increase in franchise deals and an 80 percent increase in franchise dealership partners from the fourth quarter of 2012 to the fourth quarter of 2013.
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Used Prices Set to Soften, Sales to Rise By Ted Craig
NEW ORLEANS – Usedcar prices will soften next year, but remain near historic highs as an increase in wholesale supply exceeds increased demand even as retail sales grow. This is the view of several industry experts who spoke during the recent National Automobile Dealers Association convention. “2013 was a great year to be a dealer,” said Manheim chief economist Tom Webb. “It will continue to be so in 2014.” Used-car sales grew by 4 percent in 2013, the fourth consecutive year of growth, said Jonathan Banks, executive automotive analyst for NADA Used Car Guide. Photo by Ted Craig Certified pre-owned sales STAYING STRONG: Jonathan Banks, executive analyst for NADA Used Car Guide, forecasts strong sales in 2014. performed even better, topping 2 million for the first time. CPO sales now make maintain their focus on that will cause a collapse a depreceation rate of 13.5 in prices. percent this year, close to up 13.5 percent of franchise used-car sales, however. “As they continue to feel Banks said there is no the pre-recession level of 15 dealer used-car sales. percent. Franchise dealers sold pressure on the new side, bubble in used-car prices. “We’ve seen prices grow “The wholesale market more used cars than inde- the used-car market bependents in 2013. Webb comes a very viable alter- due to fundamentals, not will gradually shift from a expects a return to a more native to make money,” psychological factors like seller’s market to a buyer’s the housing or Internet market,” said Tom Koneven split as more vehicles Banks said. One concern for the used- bubbles,” he said. tos, ADESA’s executive become available in open car market this year is a Black Book editorial di- vice president of industry sales this year. Franchise dealers will flood of off-lease vehicles rect Ricky Beggs expects analysis.
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Dealers Show Increased Optimism, Plan to Expand Two-thirds of auto dealership owners believe the U.S. economy has already “bottomed out” and is getting better, according to the second annual survey of auto dealers by Chase Auto Finance. Nearly eight in 10 dealers believe the auto industry as a whole is getting better. Eighty-four percent of dealers say their business is past the worst of the economic downturn and is getting better – a 6.8 percent increase from the same survey performed in 2012. Up 8 points from last year’s survey, nine in 10 (90.5 percent) say they are anticipating more than 5 percent in over-
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all sales growth for their dealer. Preparing their businesses to handle this growth, dealers are eyeing expansion plans. One in four will seek financing for their expansion. Forty-one percent of those dealers say they would use the financing to increase their floor plan – an 8 point increase from last year. “We’ve seen dealer expectations on hiring and business expansion gain steadily year over year,” said Thasunda Duckett, CEO of Chase Auto Finance. “Our latest survey results support that, and show optimism for an economic recovery in the works.”
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