In a year when incentives kept new-car sales high and prices low, used-car sales more than held its own, with a record 43.6 million vehicles retailed in 2003 at a value of $370 billion, according to Manheim's 2004 Used Car Market Report.
Released Jan. 31 at the annual convention of the National Automobile Dealers Association, the report takes an in-depth look at the remarketing industry, which is defined as the total business-to-business infrastructure and all the interacting transactions that ultimately support the nearly 44 million used vehicles retailed each year. This year's report also highlights how the industry is using technology to find new and better ways to sell vehicles at every stage of the remarketing cycle.
"In 2003, the auction industry partnered with remarketers to take technology in remarketing to the next level," said Dean Eisner, president and CEO of Manheim. "The industry developed and deployed a range of innovations that allowed remarketers to sell vehicles at a faster pace, with more safeguards, and these services have strengthened the overall value of the used-car market."
The 2004 report also provides an overview of remarketing in 2003, including detailed analysis and comprehensive data on both the retail and wholesale sectors. Highlights include:
Rental: A decline in air travel prompted rental fleet downsizing, but quicker cycling kept new-vehicle sales to the rental market (and the remarketing of end-of-service vehicles out of the market) at nearly 1.7 million units for the year.
Leasing: New-vehicle leases in 2003 fell to less than half their 1999 peak. The reduction in new lease originations will significantly reduce off-lease volumes in 2004 and beyond.
Fleet: The total number of fleet vehicles in operation, excluding rental, has declined in each of the past five years, but still remains above 10 million units. Fleet managers, like other remarketers in 2003, employed new technologies, selective reconditioning, and other methods of efficient remarketing to help offset faster vehicle depreciation.
Repossessions: The number of vehicle repossessions rose to 1.7 million in 2003 and reflected the past willingness of lenders to finance less creditworthy customers, according to Tom Webb, Manheim's chief economist and author of the report.
Dealers: Franchised and independent dealers retailed nearly 30 million used vehicles, with certification programs growing and continuing to boost used-vehicle sales. Buy-Here Pay-Here dealers had a record year and were active both as buyers and as sellers in the auction lanes.
The 2004 report includes a special section on technology, titled Better Decisions Faster, which explores how services such as Simulcast, CyberSuite, and Dealer Exchange have enhanced the value of the used-vehicle market.
"If you can increase your audience so that someone bids up the price by just $100, that is $100 more you make on that vehicle," Eisner said. "This is the way that we are using technology to raise the values that dealers and consignors can achieve."
