Supply Growth Still a Factor, but not Enough to Destabilize Market

Tom Kon­tos
Exec­u­tive VP & Chief Econ­o­mist
ADESA Ana­lyt­i­cal Ser­vices

Aver­age whole­sale prices con­tin­ued declin­ing again dur­ing the month of June – down 2.5% from May, but up 2.4% rel­a­tive to June 2014. Sea­son­al fac­tors played a part, but sup­ply growth con­tin­ued to brig down­ward price pres­sure. Sup­ply growth influ­ence has been some­what off­set by a “rich­er mix” of high­er-priced off-rental man­u­fac­tur­ers pro­gram vehi­cles and off-lease units dis­cussed in pre­vi­ous com­men­taries.

Here’s the lat­est edi­tion of Kon­tos Kom­men­tary

Used Retail Sales Were at Rel­a­tive­ly High Lev­els, but Down a Bit from May:
Fran­chised deal­ers had 2.5% year-over-year sales increase, inde­pen­dents up 3.6%.

Increased Sup­ply of Com­pact Cars Played Role in Soft­er June Prices:
SUVs also saw some price cor­rec­tion, but fuel prices remain favor­able to them.

Off-Rental Pro­gram Vol­umes Soft­ened Vehi­cles Remar­ket­ed by Man­u­fac­tur­ers:
Rental risk units played their part in soft­en­ing fleet/lease con­sign­or used vehi­cle prices.

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