| Used-vehicle demand gone? Not so fast. |
Days ago, in the midst of writing for this week’s used-vehicle special section, I picked up the phone and dialed a dealer for her insight. I asked her if, so far this year, she’d seen any notable fluctuation in demand for used cars and trucks.
Back in January, dealers who responded to an outlook survey by Automotive News indicated major concern about how rising interest rates might affect used-vehicle demand through the rest of the year.
What she told me was interesting: Consumers are still buying, but it’s now on a need basis, not on a whim basis.
It lined right up with what other dealers told editorial intern Abigail Ham and I for our article that recaps most of the spring selling season. As one told Ham: “There aren’t as many shoppers, but there are still a lot of buyers.”
Said another to me: “The used-car business, historically, is still very good.”
That spring lookback is just a taste of what we have for readers this week.
In this issue, readers will find our debut list of used-vehicle-only retailers. Curious about that? Well, starting this year, we chose to split off companies with large used-vehicle-only operations — such as CarMax Inc. and Carvana Co. — into their own list. Before, they placed in our annual ranking of the top 100 dealership groups by used-vehicle sales.
Our new list debuts with 20 retailers, but it has room to grow. By all means, contact the Automotive News Research & Data Center if your company should be considered for next year’s list.
We also have a Q&A with Vroom Inc.’s chief executive, who reflected on a slew of operational changes the online used-vehicle retailer needed to make in 2022.
There is a handy update on wholesale used-vehicle pricing. Spoiler: Forecasters say it appears wholesale price appreciation that heated up in the first quarter has reached a turning point.
Retail Technology reporter Mark Hollmer brings us a look at one Top 100 dealership group that is using technology, an expanded acquisition strategy and a 90-day write-down policy to boost its used-to-new vehicle sales ratio. Hollmer also gives us a status update on AutoNation Inc.’s progress this year in opening more used-vehicle-only stores.
Last but not least, we walk through how much profit per used vehicle CarMax and the six publicly traded dealership groups garnered in in the first quarter.
This used-vehicle issue could be one that gets well-used!
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In Monday’s Automotive News:
Tekion’s big win: Tekion was ready to test its state-of-the-art dealership management system a few years ago, so it took the unusual step of buying two dealerships as a real-world laboratory for its products. Tekion CEO and founder Jay Vijayan tells Automotive News that the move, in part, helped the company’s software engineers gain a greater understanding of customer needs and wants. They were able to test more software functions simultaneously than with a pilot, and also make course corrections based on how users responded.
Will 2023 begin to see a return to normal for retailers? Supply chain issues slowed the sale of new vehicles in the first half of 2022, and the second half saw consumer demand lag in response to inflation and rising interest rates. One result: Cars in the U.S. are older than ever, as consumers hang on to what they have or opt for used-vehicle purchases. In 2022, retail and fleet sales of new light vehicles in the U.S. dropped to 13.9 million, down 8 percent from 2021 and the lowest level recorded in more than a decade. That trend is good news for the aftermarket and service sectors, with the average age of U.S. cars and light trucks now up to 12.5 years. It’s a fleet in need of more repair and maintenance. Still, retailers are hoping for a more positive outlook in 2023, Automotive News reports.
Growing popularity of scooters, e-bikes creates urban safety conundrum: Car-centric urban planning poses a challenge across the micromobility sector and a new study from the Insurance Institute for Highway Safety suggests it may be time for some rethinking. The study found stricter speed limits might be pushing electric scooter travelers onto sidewalks with more frequency, and that’s creating real safety concerns as scooters and e-bikes negotiate space with pedestrians. What can be done to address the growing urban mobility issues with all the options consumers have for getting from point A to point B? Automotive News looks at the issue..
Weekend headlines
Tesla’s latest discounts signal a traditional automaker strategy: Tesla is offering discounts of more than $1,300 on some Model 3 cars in its U.S. inventory following even heavier discounts in Europe, even as the electric carmaker has raised U.S. prices on most newly ordered cars this month.
Biden delays bid to grant electric carmakers renewable fuel credits: The proposal was excluded from drafted regulation setting biofuel-blending quotas for the next three years that is undergoing final review at the White House.
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Musk commits to remaining Tesla CEO, touts Cybertruck and artificial intelligence: Tesla CEO Elon Musk said he has no immediate plans to leave the top post since he wants to oversee the development of artificial intelligence software that will enable lucrative future products such as autonomous vehicles and humanoid robots.
Stellantis recalls 219,000 Jeep Cherokee SUVs over fire risks: Stellantis said it is recalling just over 219,000 Jeep Cherokee SUVs globally for fire risks and warning owners to park outside until repairs are made. The recall covers 2014 through 2016 model year Jeep Cherokee vehicles equipped with a power liftgate. An electrical short in the power liftgate module may lead to a vehicle fire with the ignition on or off.
Former FCA boss Sergio Marchionne saved Italy’s auto industry, Elkann said: Stellantis Chairman John Elkann credits former Fiat boss Sergio Marchionne with salvaging Italy’s auto industry and rejects years of criticism over the manufacturer progressively paring its presence in the country. Marchionne, who died in 2018, and Elkann saved Fiat from near bankruptcy and combined it with U.S. manufacturer Chrysler, turning two struggling regional players into one of the world’s biggest auto producers.
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May 27, 2019: Renault and Fiat Chrysler Automobiles confirm they are in talks for a 50-50 merger to form the world’s third-biggest automaker. FCA would withdraw the merger proposal June 6.