Page 19 - On The Move - Volume 17, Issue 1

The accelerating declining trend in weekly Manheim Market Report (MMR)
holesale used vehicle prices (on a mix-, mileage-,
Wand seasonally adjusted basis) decreased 0.98%
month-over-month in November. This brought the
Manheim Used Vehicle Value Index to 138.9, a 0.1%
decrease from a year ago, and the second consecutive
year-over-year decline for the Index.
Jonathan Smoke
Chief Economist
Cox Automotive
Twitter - @smokeoncars
prices that started in September peaked in October and started November
still at an above average pace. However, by the last week in November,
price declines normalized and even saw gains for a few segments. Three-
year-old vehicle values in aggregate were down 1.6% for the month.
As a result of the higher depreciation pattern from September through
mid-November, prices in aggregate relative to the beginning of the year
continue to be lower than either of the last two years.
On a year-over-year basis, most major market segments saw seasonally
adjusted price declines in November. Midsize cars and luxury cars
outperformed the overall market, while most other major
segments underperformed the overall market. Last year
remains a tough comparison for prices as we came off
a record in the Manheim Index because of abnormally
strong consumer demand in the fall related to tariff fears
and rising interest rates.
Mixed retail results for vehicle sales year-over-year.
According to Cox Automotive estimates, total used
vehicle sales volume was down 2.7% year-over-year
in November. We estimate the November used SAAR to
be 39.7 million, down from 40.8 million last November
and up from October’s 39.6 million rate. The November used retail SAAR
estimate is 19.3 million, down from 19.4 million last year and down
month-over-month from October’s 20.6 million rate.
November total new vehicle sales were up 2.1% year-over-year, with one
more selling day compared to November 2018. The November SAAR
came in at 17.1 million, a decline from last year’s 17.4 million but up from
October’s 16.5 million rate. The decline in sales represented by sedans
continues as car share in November was 26%.
Strong fleet sales have supported the new vehicle market this year, but
growth is slowing down. Combined rental, commercial, and government
purchases of new vehicles were down 9.3% year-over-year in November.
Retail sales of new vehicles were up 4.1% in November, leading to a
retail SAAR of 14.9 million, up from 14.8 million last November and the
strongest retail SAAR of 2019. Fleet sales are up 3.2% in 2019 through
November, and retail sales are down 1.7%, as the overall new vehicle
market is down 0.9% this year.
New vehicle inventories came in under 4 million units for the seventh
consecutive month.
Rental risk pricing declines. The average price for rental risk units sold at
auction in November was up 1.2% year-over-year. Rental risk prices were
down 0.6% compared to October. Average mileage for rental risk units in
November (at 48,900 miles) was up 4% compared to a year ago and up
2% month-over-month.
Improved consumer sentiment amid mixed conditions. Consumer
sentiment improved in November based on the final data for the month
from the University of Michigan. The consumer sentiment index increased
1.4%, but left consumer sentiment slightly lower than this time last
year. The reading on current conditions declined, but the reading on
expectations improved. Home sales activity strengthened this spring and
summer aided by lower mortgage rates, and October saw a rebound
in existing home sales following a decline in September. The seasonally
adjusted annualized rate (SAAR) of existing home sales increased 1.9% in
October from September, and existing home sales are up over last year
by 4.6%. The residential real estate market’s biggest challenge is supply,
which will eventually be aided by the increasing volume of permits and
starts. The inventory of existing homes for sale was down in October by
4.3% from a year ago.
On The Move 2020 17