While falling used car prices might not be the best thing for inventory-heavy retailers, there’s a light at the end of the tunnel for franchised dealers…new-car supplies are getting better. And those who sell new Toyotas will hope supply chain issues are further resolved by the time a stylin’ all-new Prius hits the market.
In the meantime, this week marks the start of the Los Angeles Auto Show. So, keep your eyes peeled for new model launches. And the FTC has given dealers an early holiday gift by delaying data security requirements.
Market At A Glance
Apologies for sounding like a broken record, but it’s another week and another drop in used car prices, according to the CarGurus Index . This data shows that the average transaction price (ATP) for a second-hand car fell to $29,410, a $172 decline from last week. But this number crosses a significant threshold, as the year-over-year ATP now enters negative territory (-0.09%). On a 90-day basis, used car retails are down by 4.32%.
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New-Vehicle Inventory Hits 17-month High
Cox Automotive reports that unsold new vehicle inventory in the U.S. reached 1.56 million units, or 49 days’ supply, at the end of last month. That compares to 43 days’ supply or 1.32 million vehicles at the end of September. The numbers are substantially better than last year, when data showed a new car inventory of 680,000 units at the end of October 2021.
The report also highlights that European and Asian brands have the tightest supply, with most of the shortfall coming from premium (Lexus, Land Rover, Acura, and BMW) and Asian non-luxury (Toyota, Kia, Honda, and Subaru) models. From a segment standpoint, minivans and passenger cars (compact, subcompact, and midsized) were at the lowest inventory levels.
Separately, Cox also reports that the average new-car asking price in October was $46,317, a $105 increase from September. Meanwhile, October’s new-car ATP reached $48,281, an increase from September and slightly below the $48,301 record set in August.
A Beautiful Toyota Prius?
While Toyota enjoys a solid reputation for product reliability, its credentials as a cutting-edge vehicle designer come up short, to put it politely. Comparisons between Corollas and washing machines aren’t hard to find. At the same time, the company’s benchmark hybrid, the Prius, has worn its quirky wrappings as a badge of honor. But things are finally changing in Toyota’s looks department.
The 2023 Toyota Crown replaces the dowdy Avalon with a sleek exterior package that could easily carry a Lexus logo. And now, the debut of the 2023 Prius marks another bold step towards bringing excitement to Toyota showrooms. You can read the details here about the new Prius but try this fun exercise. Using a picture of the new model (below) and covering up the identifying info (logos and nameplate), show the image to those not in the car business. Ask who makes the car, and chances are no one will say Toyota.
EV-Centric Los Angeles Auto Show
This week marks the 2022 Los Angeles Auto Show (November 18-27) and a showcase for several new vehicles. Many of the launches will highlight electrified and all-electric vehicles, which is no surprise given California’s aggressive goal of ending the sale of ICE-powered automobiles by 2030.
Attendees will get an upfront look at the new Prius Hybrid and Plug-In Hybrid, an unnamed concept and the Electrified GV70 crossover from Genesis, and the Lucid Air Pure (the brand’s entry-level model). Vietnam-based EV startup VinFast will display a four-model crossover lineup, including a first-time look at its smaller VF 6 and VF 7. Fiat is using the LA show to add a second vehicle to its lineup with the return of the 500e EV.
But not everything at the show involves EVs; Porsche will present the 911 Dakar , a vehicle the German automaker calls “the first two-door sports car to offer outstanding off-road capabilities.”
FTC Extends Safeguards Rule Deadline
Procrastinating automotive retailers can breathe a little easier now that the U.S. Federal Trade Commission (FTC) has extended the deadline for implementing specific customer data security requirements until July 9, 2023.
Citing a lack of qualified personnel and pandemic-related issues, the FTC pushed back the implementation of the Safeguards Rule, which affects dealers and other non-banking financial institutions.
In a nutshell, the regulations require impacted businesses to:
- Designate a qualified individual to oversee their information security program,
- Develop a written risk assessment,
- Limit and monitor who can access sensitive customer information,
- Encrypt all sensitive information,
- Train security personnel,
- Develop an incident response plan,
- Periodically assess the security practices of service providers, and
- Implement multi-factor authentication or another method with equivalent protection for any individual accessing customer information.
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