Wholesale Used-Vehicle Prices Hit Record Highs in September

Wholesale Used-Vehicle Prices Hit Record Highs in September

Automotive Weekly

10/15/2021
Wholesale Used-Vehicle Prices Hit Record Highs in September

WHOLESALE USED-VEHICLE PRICES HIT RECORD HIGHS IN SEPT., KEY INDEX SAYS

The prices dealers pay for cars and trucks at Manheim auctions climbed to all-time highs in September, another sign of the disruption triggered by the cutbacks in new-vehicle production caused by the global shortage of semiconductors. Wholesale values rose 27 percent last month from September 2020, according to Cox Automotive's Manheim Used Vehicle Value Index, which tracks prices of cars and trucks sold at auctions. Values in September were up 5.3 percent from August.

Source: Automotive News

TESLA HEADQUARTERS MOVING TO TEXAS AFTER MUSK’S CALIFORNIA FEUD

Tesla Inc. will move its headquarters to Austin, Texas, following through on a threat Elon Musk made last year when tensions between the billionaire and California boiled over months into the pandemic. The chief executive officer announced the plan Thursday during Tesla’s annual shareholder meeting at the company’s factory in Austin. The dearth of affordable housing and long commute times are among factors limiting how much the company can expand in the San Francisco Bay area it’s called home for 18 years, he said.

Source: Bloomberg

AUTOMAKERS FUNDING NEW TECH AIMED AT MAKING GREENER LITHIUM FOR EVS

Automakers, investors and even oilfield giant Schlumberger NV are beginning to embrace environmentally friendly technologies to produce lithium that could help meet 25% or more of global demand for the electric vehicle battery metal by the end of the decade. Stellantis, Bill Gates' Breakthrough Energy Ventures and others have invested millions of dollars or signed supply agreements with so-called direct lithium extraction (DLE) start-ups in recent months in an attempt to propel the technology to commercial production, expected within the next year or two.

Source: Reuters

THE LATEST SLUMP IN CAR SALES HAS WINNERS AND LOSERS

How strong pricing and mix balance out against weak sales will shape this month’s results season for U.S. car makers and dealers. Overall, the effect may be something of a wash. In the third quarter, U.S. consumers spent 3% more on light vehicles than in the same period of pre-pandemic 2019, says Tyson Jominy, vice president of data and analytics for J.D. Power. While that was down from 28% growth in the second quarter, it doesn’t herald cash-flow problems at an industry level. But the effect has been unequally distributed.

Source: The Wall Street Journal     

HOT USED-CAR MARKET WON'T COOL SOON

The prices dealers pay for cars and trucks at Manheim auctions climbed to all-time highs in September and will likely remain elevated through spring. Whether dealers are shopping hard because of a shortage of new vehicles or in early anticipation of seasonally strong demand in the spring, or both, it's clear there is an appetite for wholesale cars and trucks. Wholesale values rose 27 percent last month from September 2020, according to the Manheim Used Vehicle Value Index, which tracks prices of cars and trucks sold at auctions. And September is not likely to mark the peak for this year.

Source: Automotive News

PENSKE, HENDRICK TOPS IN ONLINE REPUTATION STUDY

Penske Automotive Group Inc. and Hendrick Automotive Group outranked their dealership group peers in an online reputation study released Monday. Reputation, which helps automotive brands and dealership groups manage online reviews and customer feedback, said Penske ranked first on the list of U.S. public dealership groups, while Hendrick topped the list of U.S. privately held groups. Nissan had the highest score among U.S. nonluxury brands, while Infiniti ranked first among luxury brands, according to Reputation's study.

Source: Automotive News

BMW PUSHES AHEAD OF LUXURY RIVALS

BMW grabbed a 4,808-vehicle lead over Lexus in the first nine months, putting the German marque on track to claim the U.S. luxury sales crown for a third consecutive year. In the latest quarter, BMW sold 75,619 vehicles, up 8.7 percent. Light trucks accounted for 60 percent of BMW's quarterly sales. BMW also extended its lead over rival Mercedes-Benz for the year, with a nearly 28,000-vehicle advantage as of the end of September.

Source: Automotive News

THE LATEST NUMBERS ON THE MICROCHIP SHORTAGE

North America get another week of chip reprieve -

Automakers trimmed another quarter of a million vehicles out of their global production plans last week because of the ongoing worldwide shortage of microchips, according to a new estimate by AutoForecast Solutions. But North American auto plants accounted for only a small part of those cuts. European factories trimmed more than 200,000 vehicles from their plans, according to AFS, while production lines in North America cut fewer than 4,000 vehicles.

Source: Automotive News 

Hyundai’s Plan

Hyundai Motor's global operating officer said on Wednesday the automaker wants to develop its own chips to reduce reliance on chipmakers. A global shortage of semiconductors, triggered partly by surging demand for laptops and other electronic products during the pandemic, has shuttered some auto production lines globally this year.

Source: Reuters

GM SAYS IT WILL RECOVER $1.9 BILLION OF BOLT-RECALL COSTS FROM LG

General Motors Co. said it will recover from supplier LG Electronics Inc. nearly all of the $2 billion cost of recalling Chevrolet Bolt electric models for the risk of battery fires. GM said Tuesday that LG will reimburse the car maker because of manufacturing defects in battery modules supplied by the Korean company. GM in August expanded a previous recall to include all of the roughly 142,000 Bolts that the auto maker has produced since 2016, citing a likely manufacturing flaw that has been linked to at least 13 fires.

Source: The Wall Street Journal

TOYOTA AIMS TO MAKE UP SOME LOST PRODUCTION AS SUPPLIES REBOUND

Toyota Motor Corp in December wants to restart production curtailed by component shortages with a rebound in shipments from pandemic-hit suppliers that may help it claw back around a third of output lost to supply disruptions, three sources familiar with the carmaker's plans said. The Japanese carmaker has asked suppliers to make up for lost production so it can build an additional 97,000 vehicles between December and the end of March, with some considering additional weekend shifts to do so, said the sources, who asked not to be identified because they are not authorised to talk to the media.

Source: Reuters

ANOTHER CHALLENGE FOR DEALERSHIPS

The defection of veteran dealership technicians to the mobile service market is a new wrinkle to an old problem. The auto repair industry has an estimated annual shortfall of 20,000 to 25,000 technicians, Collins says. There aren't enough newcomers from vocational schools and other sources compared with the number of technicians who retire or leave for other reasons. The National Automobile Dealers Association has made facilitating recruitment and training of technicians a top priority.

Source: Automotive News

GM TO LAUNCH CADILLAC FINANCIAL NEXT YEAR

General Motors next year plans to launch a Cadillac-badged financing brand for luxury customers and dealers, according to an internal memo obtained by Automotive News. Cadillac Financial, which will operate as part of the GM Financial business, will include a concierge service, a new website and Cadillac-certified customer experience teams, according to a September memo to employees. GM Financial plans to launch the Cadillac-badged service in mid-2022.

Source: Automotive News

GM EXTENDS BOLT PRODUCTION HALT AMID SAFETY RECALL

General Motors Co. is extending its production halt of the Chevrolet Bolt EV and Bolt EUV by two weeks as it continues to work through the recall of the vehicles, the automaker confirmed Wednesday. Orion Assembly in Lake Orion will now be down through the week of Oct. 25 while GM works with battery supplier LG Energy Solution to "update manufacturing processes" and increase production of battery modules that are needed to replace those in recalled Bolts, a Wednesday alert to Orion employees obtained by The Detroit News said.

Source: The Detroit News

CONSUMERS LEANING MORE TOWARD CAR DEALERSHIP SERVICE CENTERS

A growing number of people who seek vehicle repair and maintenance work say they prefer auto dealership service departments over other repair facilities. That’s according to the newly released 2021 Cox Automotive Service Industry Study. It indicates 34% of consumers prefer dealership service centers, a percentage point increase from 2018, and ahead of general repair shops. That is good news for dealers who over the years have faced challenges from independent shops and national car-care chains, which are geographically more prevalent than are car dealerships.

Source: WardsAuto

WITHOUT 'MASSIVE GROWTH,' CPO CAR SALES STILL AHEAD OF RECENT YEARS

In a bit of irony, strong demand may indirectly be keeping the certified pre-owned sales from achieving “massive growth.” Still, year-to-date CPO sales through the third quarter are beating year-ago figures by 11% and outpace 2019 numbers by 3%, according to a Data Point report from Cox Automotive that analyzed data from Motor Intelligence. The latter ended up being the ninth straight record year for certified sales, a tally that Cox Automotive said could potentially be matched in 2021.

Source: Auto Remarketing

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