Issue Date: Car Dealer Insider May 15, 2010, Posted On: 5/25/2010
Did you know? A good benchmark for franchised retail car dealers is that when the average retail used vehicle selling price goes over sixty percent of the average new vehicle selling price, used vehicle shoppers start looking seriously at new cars. That observation comes to us from Tom Kontos, executive vice president of ADESA Using the most recent Federal Reserve Board data, the average retail price of a used vehicle represented 58% of the average new vehicle price in February. With wholesale prices growing 4.0% in March and 0.3% in April, it is possible that the 60% used-versus-new retail price ratio has already been surpassed.
As evidence, consider that retail sales of used vehicles by franchised dealers were down 4.2% on a year-over-year basis in April, while new vehicle sales were up nearly 20%. On the other hand, independent used car dealers registered a year-on-year sales increase in April, indicating that shoppers who can only afford used vehicles are still plentiful. Moreover, dealers are bidding aggressively for needed used vehicle inventory.
Tom Kontos notes that dealers are being aided in their efforts to achieve quick inventory turn and respectable grosses despite higher wholesale prices and tight used vehicle supply by using efficient wholesale and retail tools. These tools include online run lists and inventory management software that allow dealers to employ just-in-time inventory practices.
BMW is expected to rollout its first-ever generation of front-wheel-drive models in 2013 as extensions of the MINI brand. The into will include two- and four-door hatchback models, which will be longer and taller than the current MINIs. Look for power plants to include hybrid, EV, and three- and four-cylinder turbocharged options. Six-speed manual and seven-speed automatic transmissions are planned. All-wheel-drive will be another option.