Page 36 - On The Move - Volume 17, Issue 3

Used-Car Prices Improve, But Prognosis Iffy

Used-car auction prices have begun a modest comeback from the depths of says reconditioning
April, but the rebound may not be sustained, due to high supply and low de- may take longer at
mand for the rest of 2020, analysts say. Low used-car prices cut both ways for some auctions due
dealers. Cheaper used vehicles are more affordable to buy. But less money for to short staffing.
trade-ins makes it harder for consumers to finance their next purchase. The buzz among
dealers, she says, is that they’re
First, the comeback: As states relax business restrictions aimed at containing the coming to auctions to buy used-vehicle invento-
COVID-19 pandemic, auctions are getting back up to speed, and consumers are ry, but not to sell. Rather, she says dealers are retailing trade-ins
returning to showrooms around the country. As a result, dealers need to restock themselves, or disposing of them in dealer trades.
used cars and trucks, says Laura Wehunt, Black Book’s vice president-automo-
tive valuations. “The retail side has done well. Dealers are going back to auc- Alex Yurchenko, Black Book’s senior vice president-data science, says two po-
tions,” she says in a phone interview. tential negatives loom over the would-be comeback in auction values. Funda-
mentally, consumer demand is likely to stay depressed, given a virus-related
“After eight consecutive weeks of falling car prices, the flagging economy and high unemployment, he says. “Unemployment, GDP
trend reversed,” Black Book says in a May 27 report. negative growth, weakening of the economy – all that has a big effect on the
In terms of value retention, the wholesale used-car demand side.” At the same time, used-vehicle supplies inevitably will rise, he
market depreciated an additional 0.11% in the pri- says. Lease returns that were postponed in March, April and later, will enter the
or week, after dropping 0.46% the week before. pre-owned vehicle market. Rental companies are downsizing their fleets, includ-
ing Hertz, which recently declared bankruptcy, he says.
KAR Global Analytical Services says the av-
erage wholesale price was $9,621 in April, Kontos agrees. “There is a tremendous amount of unsold supply that has built
down 16.3% vs. April 2019. That’s the larg- up in the weeks that followed the shutdown, and we know that that volume will
est drop since KAR started its current data continue to overhang the market going forward,” he says. “So, it’s best to be
series in 1994, according to Tom Kontos, cautious about expectations going forward.”
the firm’s chief economist.
Source: WardsAuto
Black Book’s Wehunt says that while business conditions have improved, auc-
tions are still recovering from pandemic-related shutdowns. For instance, she

Volkswagen Previews Facelifted Arteon

Volkswagen reveals the altered front-end appearance of Volkswagen Group design chief Klaus Bischoff says, “With the Arteon Shoot-
its 2021-model-year Arteon in a sketch generated by its in- ing Brake we have created a new balance between speed, power and space.”
house design operations ahead of a planned June 24 unveiling Conceived to offer greater versatility than its 4-door sedan sibling, the Arteon
of the upgraded fastback. The facelifted Arteon will be revealed at Shooting Brake receives a heavily sloping roofline and angled rear tailgate.
the same time as the all-new Arteon Shooting Brake, which will
not be sold in North America, according to information provid- Along with the exterior design changes, Volkswagen says the Arteon lineup
ed to Wards by the German automaker. will benefit from “comprehensive upgrades…with new high-tech drives and
intelligent comfort and assistance systems.” The interior will receive a newly
Among the changes coming to the three-year-old Arteon designed dashboard and added functions, including Volkswagen’s MIB3 info-
is a new-look grille housing a full-width lighting strip tainment system.
within a heavily reprofiled front bumper. In pre-
viewing the Arteon Shooting Brake, Volkswagen The facelifted Arteon fastback to be sold in the U.S. will have a turbocharged
also acknowledges plans for a new top-of- gasoline engine with 48V mild-hybrid system. A hot version from Volkswagen's
the-line R model complete with distinctive R division will arrive later, powered by a 300-hp-plus evolution of the automak-
front-bumper styling featuring larger er’s turbocharged 2.0L gasoline 4-cyl.
air ducts and a more defined splitter
element than standard Arteon The new Arteon will introduce more intelligent assist systems. Travel Assist is
models. designed with long-distance journeys in mind and will “take over steering,
acceleration and
braking up to
speeds of 130
mph (209 km/h)
under the control
of the driver.”

Source: WardsAuto

34 www.maada.com.maada.com
34 www