Wholesale Prices Continued to Fall in May, Kontos Reports
The year-over-year drops in wholesale prices in February, March and April continued in May, with wholesale prices dropping 2.8 percent vs. April and 4.5 percent from a year ago.
CARMEL, Ind. — The wholesale pricing environment continued to soften in May, with prices falling again on a year-over-year basis as they did in February, March and April when the price-elevating impacts of Superstorm Sandy subsided, according to ADESA Analytical Services Chief Economist Tom Kontos.
“Unlike the previous three months, however, prices fell on a month-over-month basis, indicating that the spring/tax season is winding down, or already has,” Kontos wrote in his monthly Kontos Kommentary report. “Still, retail sales of new, CPO and used vehicles in May were impressive and — as this translates into demand for returning supplies of used vehicles — will cushion the fall in used vehicle values.”
Wholesale used-vehicle prices in May averaged $9,811 — down 2.8 percent compared to April and 4.5 percent relative to May 2012. The 4.5 percent year-over-year decline matched April’s decline, according to ADESA Analytical Services data.
Meanwhile, retail used-vehicle sales were down 2.3 percent on a year-over-year basis for franchised dealers and 7.2 percent for independent dealers in May, although both dealer types saw double-digit month-over-month increases, according to data from CNW Marketing/Research. Sales of certified pre-owned (CPO) vehicles were up 6.1 percent on a month-over-month basis and 19.2 percent year over year based on figures from Autodata.
Cars, crossovers, SUVs and trucks all experienced decreases in value in May unlike in April, when SUVs showed some price strength.
“One notable exception is full-size pickups (up 0.1 percent month over month and 5.2 percent year over year), which appear to be benefitting from an improving home construction market,” Kontos pointed out.
The prices of used vehicles remarketed by manufacturers were up 1.6 percent month over month, but down 4.5 percent on a year-over-year basis. Prices for fleet/lease consignors were down 2.1 percent sequentially, and down 1.2 percent annually. Dealer consignors saw a 2.4 percent average price decrease vs. April 2013, and a 5 percent downturn vs. May 2012.
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