Automotive News - February 25, 2008 - (Page 22)

22 • FEBRUARY 25, 2008 remarketing GM: Supply of vehicles to certify will stay steady Arlena Sawyers asawyers@crain.com Certified sales, January Jan. 2008 Jan. 2007 General Motors says its dealers will get the same number of used vehicles to certify and sell this year as in 2007 despite the company’s cutback in sales to rental fleets. GM executives concede the reduction in less-profitable fleet sales is limiting the number of retired rental vehicles eligible for certification. At the same time, they expect an increase this year in the number of cars and trucks coming off lease from GMAC Financial Services. As a result, said Paul Pejza, manager of the GM Certified used-vehicle brand, GM will remarket an estimated 800,000 vehicles in 2008 — about the same number as last year. “Off-lease vehicles will help us at the wholesale level by providing dealers with a wide selection of used products,” Pejza told Automotive News. Rental sales down Last year, GM, Ford Motor Co. and Chrysler LLC cut sales to rental fleets to 1.4 million vehicles, down from 1.7 million in 2006, according to the Manheim auto auction company. The Detroit 3’s share of sales to U.S. rental fleets dropped to 73 percent in 2007 from 81 percent the previous year, Manheim says. Manheim estimates that nearly 2.5 million off-lease cars and trucks will enter the used-vehicle market this year, up from 2.3 million units in 2007. GM cut its rental fleet sales to 596,104 units last year from 703,798 in 2006, spokesman Rob Minton says. GM declined to project its rental sales for 2008. Paul Pejza, GM Certified manager: “Off-lease vehicles will help us at the wholesale level by providing dealers with a wide selection of used products.” Pejza said the cars and trucks GM is selling to rental fleets now tend to have more upscale equipment, such as leather interiors and sunroofs. Although such vehicles are more expensive, he said, they should prove easier to sell at retail. They also are likely to have higher residual values, he said. “Five or 10 years ago you’d get a white Chevrolet Impala with cloth seats and not a lot of options” sold to rental fleets, Pejza said. “The ones now have higher content, and they are ready to be sold as certified.” Last month, GM’s five certified programs sold 37,669 used vehicles — 12.9 percent fewer than in January 2007. GM Certified, which includes Chevrolet, Buick, Pontiac and GMC, sold 33,339 used vehicles in January — 11.2 percent below the year-ago month. Cadillac, Hummer, Saab and Saturn have separate certified programs. BMW 7,313 Chrysler Division 3,116 Dodge 4,232 Jeep 2,435 CHRYSLER LLC† 9,783 Ford division 9,571 Lincoln Mercury 1,535 Ford div., Lincoln, Mercury 11,106 Jaguar 550 Land Rover 627 Volvo 2,085 FORD MOTOR CO. 14,368 Buick 2,094 Chevrolet 23,023 GMC 3,688 Oldsmobile 23 Pontiac 4,511 GM Certified 33,339 Cadillac 3,226 Hummer 129 Saab 429 Saturn 546 GENERAL MOTORS 37,669 Acura 3,088 Honda Division 16,105 AMERICAN HONDA 19,193 HYUNDAI 608 MAZDA 424 MERCEDES-BENZ USA 3,624 MITSUBISHI* 96 Infiniti 232 Nissan Division 4,595 NISSAN NORTH AMERICA 4,827 PORSCHE 563 SUBARU 530 SUZUKI Lexus 3,639 Toyota Division 20,424 TOYOTA MOTOR SALES 24,063 Audi 2,592 Bentley* 60 Volkswagen division 2,384 VW GROUP OF AMERICA 5,036 TOTAL CERTIFIED 128,097 5,645 2,933 3,920 2,253 9,106 9,534 1,614 11,148 815 466 1,957 14,386 3,188 24,993 3,800 126 5,443 37,550 3,732 127 527 1,326 43,262 3,208 14,986 18,194 16 422 3,609 92 217 3,838 4,055 455 250 2 3,658 20,023 23,681 1,860 39 2,583 4,482 127,657 Black Book plans daily updates ATLANTA — Black Book, which publishes wholesale-price guides to used vehicles, will update its values daily starting this spring, says company President Tom Cross. Black Book will make the values available in several electronic formats — available for hand-held computers, cell phones, Web browsers, custom applications and lead generating services. Rick Beggs, managing editor of Black Book, says the company will compile data for the daily updates from sales at vehicle auctions. Cars.com rolls out video service SAN FRANCISCO — Cars.com is offering dealers a feature that combines video footage and voiceover narration when they list used vehicles on the Web site. The VideoShowcase feature also provides Web links and search results for Cars.com listings that include video. Cars.com CEO Mitch Golub introduced the service here at this month’s National Automobile Dealers Association convention. The company cites independent research that found 55 percent of consumers who watched an online video ad visited the advertiser’s Web site. Of those visitors, Golub said, 30 percent went to a company store and 24 percent made a purchase. Cars.com says about 10,000 franchised dealers and 4,000 independent dealers sell new and used vehicles on the site. †DaimlerChrysler sold the Chrysler group on Aug. 3, 2007 *Estimate Source: Automotive News Data Center and Autodata Corp. Vehicles on eBay Motors Starting in the second quarter, GM says it will list its dealers’ certified used vehicles on the eBay Motors classified Web site. The vehicles will not be sold in eBay online auctions, GM says. The eBay Motors site attracts 11 million unique visitors each month. Dealers will not be charged to post the certified-vehicle listings, GM says. In January, the industry sold 128,097 certified used vehicles — 0.3 percent more than in January 2007. c Manheim launches search tool SAN FRANCISCO — Manheim, the nation’s largest vehicle auction company, has launched an online tool that it says will give dealers faster, easier access to cars and trucks for sale at its auctions. Manheim.com’s PowerSearch allows dealers to examine listings of cars and trucks at Manheim’s physical auctions before the vehicles go on sale. Dealers also can review vehicles offered on Manheim Simulcast and its online sales channel, OVE.com, Jim McKnight, Manheim’s president of online solutions, said this month at the National Automobile Dealers Association convention here. Manheim Simulcast enables dealers to take part in live auctions remotely via computer. Used-vehicle supplies up, prices down in Jan. Arlena Sawyers asawyers@crain.com Average wholesale used-vehicle prices, January Average price January 2008 Average price December 2007† Average price January 2007 % change vs. December 2007 % change vs. January 2007 Supplies of used vehicles at auctions were about one-third higher than normal last month. As a result, wholesale prices of used cars and trucks dipped in January. Analysts for the two largest U.S. auction companies say they expect used-vehicle prices to remain sluggish for much of 2008. They cite growing numbers of off-lease and repossessed vehicles returning to market, along with delays by remarketers in selling cars and trucks retired from rental service. Tom Kontos, executive vice president of customer strategies and analytics at ADESA Inc., said U.S. auctions had about 55 days of inventory at the beginning of last month. A typical January supply would be 40 to 45 days, he said, and that supply would have been expected to start to drop. “We haven’t seen a decline in those record inventory levels this year,” Kontos told Automotive News. But as the year goes on, Kontos said, used vehicles could become an appealing alternative to new cars Cars Small and midrange Sporty Traditional Upscale Total car $7,806 11,595 10,716 12,576 $8,703 $7,606 12,021 11,130 13,129 $8,665 $7,198 10,642 7,940 7,765 10,520 12,531 14,457 $10,652 $9,739 $7,848 12,260 10,803 13,433 $8,818 $7,353 11,845 8,470 8,264 10,772 13,733 14,469 $11,021 $9,884 2.6 –3.5 –3.7 –4.2 0.4 1.1 0.8 –1.4 0.3 0.1 –5.2 –2.3 –1.3 –0.3 –0.5 –5.4 –0.8 –6.4 –1.3 –1.1 –9.4 –7.5 –5.7 –2.2 –13.5 –2.4 –4.6 –1.8 Light trucks Small pickups $7,274 Full-sized pickups 10,729 Minivans 7,832 Full-sized vans 7,792 Lower midrange SUVs 10,531 Large SUVs 11,879 Other SUVs 14,119 Total light truck $10,515 TOTAL WHOLESALE $9,705 Note: Based on approximately a half-million AuctionNet wholesale vehicle transactions a month †December revised *Includes standard and premium crossovers and small, upper midrange and premium SUVs Source: ADESA Analytical Services based on AuctionNet data and Automotive News market classifications and trucks — for dealers and consumers. New-vehicle sales this year are projected to be the lowest in a decade. Manheim chief economist Tom Webb attributes January’s sluggish prices to economic weakness, reflected in a credit crunch and re- cession fears. Tighter credit “lowers used-vehicle values,” Webb says. “Used vehicles have to be re-retailed with some credit.” In January, the average wholesale price of used vehicles sold at auction was $9,705, ADESA says. That price was 0.3 percent below the December 2007 average and 1.8 percent below the January 2007 average. Large pickups and SUVs were especially hard hit. The average wholesale price of used full-sized pickups was $10,729 in January, down 9.4 percent from the year-ago month. Big used SUVs sold at auction last month for an average of $11,879, down 13.5 percent from January 2007 and 5.2 percent from December 2007. Manheim’s Used Vehicle Value Index fell in January for the fourth straight month. The index stood at 109.1 last month, down from 110.2 in December 2007 and 113.3 in January 2007. The index measures changes in used-vehicle prices, adjusted for model mix, mileage and time of year. c Turn to page 24 for the Used Vehicle Auctions http://Cars.com http://Cars.com http://Cars.com http://Cars.com http://Cars.com

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Automotive News - February 25, 2008 Chamco's 'consultant' is forced into limelight Group 1, Gulf States clash Dealer profit stuck in neutral Ghosn: Autos are in recession NHTSA investigates Toyota, Pontiac cars' windows The upside of upside down: Better belts Push buttons will alter interiors Schwarzenbauer leaves Porsche for Audi CSM: Cuts in auto output to ease in 2nd quarter Ford's Hispanic ad campaign takes it to the mat Hydrogen slips as a solution for the greening of autos Kia to spend big to upgrade dealerships GMAC: Office cuts won't affect dealers LaSorda: Chrysler's $700 million axle plant is 'going up' Toyota hybrid battery partner boosts output Buick may add a car below the LaCrosse Toyota could add 2 more small vehicles to U.S. lineup Calif. regulators shoot for 40-plus mpg by 2020 Loyalty/conquest: Power's best, worst Chrysler firm on retrieving tools from Plastech Former NUMMI exec applies Toyota ideas to aircraft industry Kozyra's resume reflects volatile supplier climate Obituaries Chrysler, Plastech now have chance to work together Do it the NADA way Hail, Geneva; spring must be near Volt's potential is unlimited The Volt is terrific; give GM a hand Beware of high tech running amok Teach reporters half full/half empty Dealer wants to view Conti exec: Inside, it's about the info Dealers Caddy chief's goals: Build on CTS, prestige, high-tech Geneva looks like another green scene Volvo XC60 system senses impact, hits the brakes Saab 9-1 concept awaits green light GM: Supply of vehicles to certify will stay steady Used-vehicle supplies up, prices down in Jan. Black Book plans daily updates Cars.com rolls out video service Manheim launches search tool Luxury sales channel is high on GM agenda GM seeks dealers' help with 5-point green plan Northwood offers dealer MBA Court rejects Chicago dealer's appeal Taxes distort Jan. sales in Europe Nissan to cut designers NHTSA studies window woes Bank: Autos easier to afford VW labor boss gets jail term Delphi sells 2 units Toyota Tundra had tough Jan. Chrysler's white knight: We're investors, not heroes Ford's 'Knight Rider' is Sync on steroids GMAC parties have lost a bit of their pizazz Global warming? It's a crock - but . . . Nardelli's NASCAR debut is a winner A frosty reception for the TSX

Automotive News - February 25, 2008

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