IRVINE, Calif. – Kelley Blue Book , reports that car shoppers are encouraged to buy their next used vehicle before the end of the year, as values are expected to increase 4 to 6 percent in early 2012.
Used-vehicle values have dropped 2.6 percent overall in October, marking the fifth consecutive month of declines. Since peaking in June, used-vehicle values overall have dropped 10 percent with the most significant declines coming from fuel-efficient vehicles, falling more than 20 percent. Now that new-vehicle inventory levels, especially for Japanese automakers, have started to return to normal and fuel prices have dropped, the car market has experienced a substantial cooling.
“Considering the already significant declines in used-car values since June, Kelley Blue Book predicts that values will decline an additional 3 to 4 percent by the end of the year,” said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book. “Used-car values typically decline through the fourth quarter due to a seasonal drop in demand that lasts through the holiday season. We believe sales volume also will decline through the remaining fourth quarter, similar to years past, and as a result values will likely remain soft through year-end, with few exceptions.”
Although values are expected to decline in the fourth quarter, Kelley Blue Book analysts predict sales will pick up early in 2012. Projections for 2012 show values bouncing back in thefirst quarter of the year.
“Since 2009, used-vehicle registrations in the first quarter have increased by 15 to 20 percent on average from the preceding fourth quarter, and since we expect a similar increase in demand in 2012, a lack of supply will likely put upward pressure on values early in the year,” said Gutierrez. “Since we expect fewer leases and trade-ins replenishing supply, values will likely increase across the board as supply struggles to keep pace with demand. Values for certain segments can change more aggressively should fuel prices increase similar to earlier this year.”
Since 2009, values have increased between 1 to 4 percent overall in the first quarter, due to this spike in sales. Due to the potential supply shortfall facing the market next year, Kelley Blue Book reports that values may increase 4 to 6 percent next year.
The Promise and Problem of Connected Intelligent Cars
Written by Bruce Roffeyhttp://www.tmcnet.com/topics/articles/188800-promise-problem-connected-intelligent-cars.
This week I’m at the Freescale Technology Forum, Freescale is arguably the leading vendor of processors to the automotive industry, and last week I moderated a panel forRutberg & Company’s Future Mobile Conference in San Francisco on the Connected Automobile. The combination of these events means we’ll have a lot to look forward to and a lot to be worried about. Let’s talk about both this week.
The Problems
Let’s get the problems currently surrounding connected intelligent cars first. The biggest is that car companies operate on a 5 year development cycle. To put that in perspective that means they are working to make the iPad 2 work in cars that will exist when the iPad 6 is shipping. That means that much of what that future device will be able to do the car won’t be able to support. In addition security threats are increasing dramatically almost on a weekly basis and not being able to respond effectively for up to 5 years is problematic. We have already had a case where a large number of VW cars were stolen because someone figured out how to hack into them through their tire sensors, think of how much worse this will be when the cars are connected to the web? The car companies haven’t agreed yet on a common interface that can be used for the wide variety of entertainment and communications devices that are coming. This means there is not short term fix for these problems coming and there will likely be bigger security breaches coming in cars particularly against systems that weren’t designed to be secured.
Finally the biggest threat to this movement is likely the concerns sounding safety and distractions. As the industry puts more and more in front of the car buyer the concerns surrounding the related distractions are going vertical and so too is the emphasis on regulating this technology. We may need self-driving cars if we want to use some of the things the industry is planning on putting in them. Unfortunately self-driving cars are estimated to be more than 10 years out.
The Opportunity
Ford is reporting that cars with Ford’s simple Sync system are outselling cars that don’t have this system by 2 to one. One of the advantages of Sync is its simplicity because it puts the greatest emphasis on the products it connects to and these products can then pass through many more of their enhancements. EvidentlyFreescale (News - Alert) is the hardware company behind Sync.
Projections from my panel suggest that buyers will increasingly prefer cars that have a greater ability to connect to the products they want to use in them. This means that the car company that has attractive products which best make use of the technology we buyers will want to connect to them will likely be the most successful. The panel felt that BMW was the most aggressive here; while I thought Hyundai appeared the most aggressive (they even provide an iPad for their car manual). (I’m an Audi driver and have trouble ceding any advantage to BMW).
What’s Coming
This is the cool stuff and mostly comes from the Freescale conference. The coolest thing is active suspension. Michelin showcased a working active suspension system at the show that could be contained in the wheel. Active suspension actually lifts the wheel over bumps and actively adjusts for roll. This not only leads to a vastly flatter and smoother ride it would result in a much better handling and safer car. It is really cool.
The technology is being used to make motorcycles safer as well as there was a demonstration of an airbag system a motorcycle rider could wear as a vest. In a crash this vest would inflate protecting the driver’s body and neck against injury.
NASCAR showcased the use of Freescale processors in their new injection system. The system itself isn’t very advanced (NASCAR unlike F1 is kind of old school) however the interesting part was that NASCAR which requires a high level of commonality between car teams and McLaren who developed the solution has secured this system at multiple levels and may be showcasing how our future cars could be better secured against hackers as well.
Ford talked about networking the cars so that each would be a part of an intelligent system which could not only notify out on traffic and accidents, but get EMTs to injured drivers more quickly, and better avoid accidents in the first place.
The underlying technology, as showcased by the GM VOLT car (massively covered by Freescale processors) where that technology is used to make the car ultra-efficient and move dynamically between electric and gas fueled electrical systems.
One of the coolest thing, was the ability to link your tablet to your car and not only enjoy some of the content from the tablet on it but run diagnostics, check on what is going on (is someone messing with it, is your child abusing it, simply unlocking it or remote starting it, or remote controlling it like setting off the horn to keep the dog from peeing on it). I love the part where you plan your trip on your tablet and then send that to the car’s navigation system so it is ready to go and Freescale demonstrated this on the GM provided VOLT and a Corvette roadster that QNX showcased. One of the demonstrations showcased the distraction risk as the screen on the Corvette showcased a remote burglary which would likely land the driver in the trunk of the car in front of them.
Cars Are Getting Much More Entertaining
The monetary benefits of moving ever more technology into cars for both the car companies and the vendors who sell it is driving amazing changes. Working against this is the slow cycle time for car development, a glacial 5 years, and the increasing distractions this technology may create will likely also create regulations that prevent some of the more interesting parts from coming to market timely. However, overall, cars will get safer, more efficient, more amazing, and a lot more fun thanks to this technology and I think we can all get behind that.
Rob Enderle is President and Principal Analyst for the Enderle Group. To read more of his articles on TMCnet, please visit his columnist page.
Edited by Jennifer Russell
To 3D Or Not To 3D: A Guide To Choosing The Right Cars 2 Ticket
Written by Bruce RoffeyTo 3D Or Not To 3D: A Guide To Choosing The Right Cars 2 Ticket
Skyrocketing Demand For Used Cars Unparalleled
Conover, NC – Lower supplies and the high price of gasoline is skyrocketing the demand for fuel efficient cars, including used vehicles. That demand for used cars means that if you want to get a new car, your trade-in may be worth thousands of dollars more than it was just a few years ago. “Nothing is more frustrating for car dealers than you standing on our lot ready to buy a car and spend money and then we don't have anything like the car you are looking for,” says Bruce Roffey of Village Motors in Conover NC. He notes that “Right now, for a number of reasons there is a shortage of quality used cars on the market, and we need cars bad!”
"Fewer and fewer people are trading in their vehicles, especially the fuel efficient cars. They're keeping those older cars and we need them," Roffey said. A lot of people are holding on to their used cars. Making them last a few more years, and fewer people are buying newer cars. Add to that the earthquake in Japan shutting down production lines for several major auto makers and their suppliers, the result is fewer of these newer, fuel-efficient vehicles on the market. Japanese automakers lost about 200,000 new car sales as a result of March’s devastating earthquake and tsunami,
"That goes full circle to what we were talking about, between the disastrous government run Cash for Clunkers spectacle and the terrible crisis in Japan, the lack of used car inventory right now is almost umparalleled," Roffey said. "What we're promoting for the next seven days is we'll offer up to $3500 over the appraised value for any vehicle on trade or not on trade. If someone doesn’t want to trade it, we'll certainly try to buy it outright from them," Roffey said. Dealers say they are looking for late model fuel efficient cars, but even used SUVs like the GMC Envoy, Ford Explorers, and Toyota 4Runners have seen a 20 percent increase in their value since the beginning of this year. “And trucks are a really great buy right now,” added Roffey.
“We are just coming off one of the best 1st quarter sales periods ever, so we are fortunate to have had the forsight to have been buying heavily in anticipation of these circumstances, but supplies are as tight as I’ve ever seen, and I’ve seen alot,” laughed Roffey.
About the Author: Bruce has spent the past 20+ years trying to change the landscape of the car business and the bruised reputation of car salespeople all over the country. He is also the author of "Eight Keys to a Better Car Deal" . His latest crazy idea, “The Celebrity Academy” headquarted in Charlotte, NC is scheduled to open this summer coinciding with the release of “You are The Brand, Stupid” a book he is co-authoring with his friend and business partner Tracy Myers.
Skyrocketing Demand For Used Cars Unparalleled
Conover, NC – Lower supplies and the high price of gasoline is skyrocketing the demand for fuel efficient cars, including used vehicles. That demand for used cars means that if you want to get a new car, your trade-in may be worth thousands of dollars more than it was just a few years ago. “Nothing is more frustrating for car dealers than you standing on our lot ready to buy a car and spend money and then we don't have anything like the car you are looking for,” says Bruce Roffey of Village Motors in Conover NC. He notes that “Right now, for a number of reasons there is a shortage of quality used cars on the market, and we need cars bad!”
"Fewer and fewer people are trading in their vehicles, especially the fuel efficient cars. They're keeping those older cars and we need them," Roffey said. A lot of people are holding on to their used cars. Making them last a few more years, and fewer people are buying newer cars. Add to that the earthquake in Japan shutting down production lines for several major auto makers and their suppliers, the result is fewer of these newer, fuel-efficient vehicles on the market. Japanese automakers lost about 200,000 new car sales as a result of March’s devastating earthquake and tsunami,
"That goes full circle to what we were talking about, between the disastrous government run Cash for Clunkers spectacle and the terrible crisis in Japan, the lack of used car inventory right now is almost umparalleled," Roffey said. "What we're promoting for the next seven days is we'll offer up to $3500 over the appraised value for any vehicle on trade or not on trade. If someone doesn’t want to trade it, we'll certainly try to buy it outright from them," Roffey said. Dealers say they are looking for late model fuel efficient cars, but even used SUVs like the GMC Envoy, Ford Explorers, and Toyota 4Runners have seen a 20 percent increase in their value since the beginning of this year. “And trucks are a really great buy right now,” added Roffey.
“We are just coming off one of the best 1st quarter sales periods ever, so we are fortunate to have had the forsight to have been buying heavily in anticipation of these circumstances, but supplies are as tight as I’ve ever seen, and I’ve seen alot,” laughed Roffey.
About the Author: Bruce has spent the past 20+ years trying to change the landscape of the car business and the bruised reputation of car salespeople all over the country. He is also the author of "Eight Keys to a Better Car Deal" . His latest crazy idea, “The Celebrity Academy” headquarted in Charlotte, NC is scheduled to open this summer coinciding with the release of “You are The Brand, Stupid” a book he is co-authoring with his friend and business partner Tracy Myers.
Preaching to the Choir – The Inevitable Rise of the Used Car Economy
My name is Bruce Roffey and I’ve been in the car business for over 20 years now, and there is one thing that has always seemed abundantly clear to me. Buying new cars is for folks with excess money. As I interact with customers, clients, vendors, and other dealers, it is very clear that there are less and less people with excess money. Most folks I talk to have more month than they have money.
Once we start to really pay attention to where our money is going, which is inevitable as our purse strings tighten, our priorities shift. When things are just a little tighter, the actual cost of that couple of months of new car smell may cross your mind. When our cup is overflowing, what difference does two or three thousand dollars make? Usually it’s 'only' a few dollars extra a month. But, now that our priorities are shifting back to what’s really important, friends, family, work, church, etc. , being able to brag on that ‘Brand New’ car sounds sort of selfish and out of focus.
Right now, while it is important to watch every dime, our focus is on getting the kids to school, getting to work, dependable, safe, economic transportation. I read recently that one of the positive outcomes of harder times is that the people as a whole tend to really focus on the things that matter the most. So, like we’ve been saying for decades, the used car industry is thriving in a fairly severe economic downturn. The reason, as I see it from here, is the value proposition. It just makes good economic sense to let some other person endure that initial loss we call depreciation.
Used Car Sales in North Carolina Follow National Trend
Written by Bruce RoffeyVillage Motors in Conover North Carolina specializes in the sale of used cars, trucks and SUVs. Like many used car dealers, Village Motors continues to thrive as consumers pay more attention to where their hard earned dollars are going.
Used car sales at Village Motors in Conover, NC continue to rise as buying a used car continues to be the smarter, more economical choice among consumers.
