Welcome to Topmarq Dealer Weekly, your snapshot of industry news and happenings. This edition looks at flat used car pricing (with a couple of interesting exceptions) and how things are still expensive for consumers. Unsurprisingly, the effects of Russia’s invasion of Ukraine are starting to impact automakers. We’ll also check out how online seller Shift will adapt its business model via an acquisition.
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Market at a Glance
- Used car pricing drops (a bit)
- Vans stay hot
- Mercury and Pontiac numbers rise—wait, what?
Used car prices continue to drop somewhat, says CarGurus. The average transaction price of $30,421 from the preceding 30 days was down $130 from last week. And the 90-day average continues to slide, with pricing showing only a 0.07% increase over this time.
The demand for work vans continues to lead to higher prices for this category, with the average transaction now crossing the $33,000 threshold. Year-over-year, that’s an increase of more than 53%.
And while a deep dive into sales data can make the eyes glaze over, every once and again, something interesting pops up. In this case, we’re seeing an increase in the average price over the past month for used Mercurys and Pontiacs. It’s not much of a bump (3.41% for Merc and 1.08% for Pontiac), but this comes when transaction numbers for most other brands (n used form) are mainly flat. It appears people are loving the Grand Marquis, Firebird, GTO, and even the Vibe. Strange times indeed.
Monthly Car Payments Hit Record High
Further adding to the nation’s inflation woes is a recent report from Cox Automotive showing that the typical monthly car payment has reached $689, the highest on record. Despite a slight drop in the average transaction price and a gain in median income, a rise in interest rates helped elevate the numbers for the typical car shopper. But things aren’t all doom and gloom; the data show that the amount of income needed to buy a vehicle dropped slightly from 42.9 weeks to 42.8 weeks. Take the good news where you can.
Jeep and VW Production Already Impacted by Russia-Ukraine War
As we mentioned last week, Ukraine is a major processor of neon, a crucial element in semiconductor manufacturing. Among the first automakers to feel the pinch is Stellantis’ Jeep plant in Melfi, Italy, slowing production of the Jeep Renegade and Fiat 500X in response. While these vehicles aren’t large sellers in the U.S. (Fiat dealers sell only about 100 500Xs per month here), it’s a game of wait and see if other brands face similar problems.
While not chip-related, Volkswagen announced it’s moving some production from Europe to China and North and Latin America this week. The reason? A lack of wiring harnesses usually coming out of Ukraine. This follows on the heels of Ford’s one-week shutdown (last week) of F-150 production in North America. The automaker cited the chip shortage as the reason but didn’t specify if the war played a role in the stoppage.
Shift Changes Gears with Acquisition of Fair Technologies
Since going public in 2020, online used car seller Shift has been focused on catching up with its bigger competitors, like Carvana. In an announcement this week, the San Francisco-based dealer announced that it’s acquiring Fair Technologies, which was supposed to roll out its own online auto marketplace this year. The deal is pegged at a $15 million value.
According to Shift CEO Geroge Arison, the move will enable the company to accelerate its plans to add third-party vehicles to its operations, “At Shift, we’ve long envisioned building a digital marketplace where both dealers and independent sellers can list their cars alongside Shift’s owned inventory.”
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