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CNW Predicts Strong Spring/Summer Sales, Especially for Used Market

January 26, 2010

Not only is CNW Market Research anticipating a 9 percent increase in used sales for January, but current floor-traffic data has the firm predicting a strong spring/summer selling season.

Based on deliveries during the first 15 days of the month, the Bandon, Ore.-based market research firm expects the month to end with 2 million used vehicles sold. Additionally, it expects sales for all retail channels – franchised, independent and private party – to increase in January from 6.6 percent to more than 15 percent.

“This year (2010) is the year of the ‘wet dog,’ with the used industry shaking off excess gloom and possibly registering a near 40-million unit year,” wrote CNW’s Art Spinella. “January 2010 was the best [month] since that month in 2008, a year when the industry sold about 36.6 million used units.”

The difference this time around, Spinella continued, is the economy is on a slight upswing, as he projects the industry will carry the January momentum throughout the year.

As an even better sign, CNW data points to consumers willing to spend for used cars, with dealers and even private parties seeing an increase in prices consumers are willing to pay. According to CNW, transaction prices increased from $9,851 in January 2009 to $10,411 this month. There was a downside, however.

According to CNW, January’s average price fell about 2.3 percent compared December, which Spinella said could reflect some pretty horrific weather in major parts of the United States.

The poor weather, however, didn’t slow down rising floor-traffic numbers, especially used-car lots. Floor traffic for used cars shot up by 62 percent, while traffic for new vehicles was up 45 percent. However, the data showed the industry is still a ways away from reaching 2008 floor-traffic levels.

According to its floor-traffic index, traffic for new vehicles stood at 59. 1 score, while used came in at 62.1. A year ago this time, the index stood at 103.4 for new and 94.9 for used.

“The resurgence of floor traffic at dealerships and lots is only a piece of the economic puzzle,” Spinella noted. “CNW is also seeing increased floor traffic at other retail establishments. For cars, it’s necessary to build floor traffic today in order to sell vehicles in three to six months. The current numbers seem to indicate a strong spring and summer selling season.”

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