Strong new-vehicle sales bode well for auctions
|2013||change vs. 2012|
|Units entering auctions||15,170,000||4%|
|Sold units’ gross value||$75.7 billion||2%|
|Average price per unit||$9,210||–2%|
|Source: National Auto Auction Association|
National Auto Auction Association member auctions increased their sales of used cars and trucks 4 percent to 8.2 million in 2013 as the number of vehicles entering their auctions increased 4 percent to 15.2 million.
The conversion rate -- the portion of vehicles offered at an auction that are sold -- remained unchanged at 54 percent.
Those are among the findings of the association's 17th annual survey of its members' businesses. The survey, which covered 2013, was released in May.
Higher new-car sales, especially those sold through leases and to rental-car companies in the past few years and this year, will fuel auction sales growth into the foreseeable future, said Ira Silver, NAAA's chief economist.
"We look three or four years back and there was a pick-up of vehicles going into lease, so that business is fairly easy to predict," said Silver, who is also an economics professor at Texas Christian University's Neeley School of Business in Fort Worth, Texas. "We're going to see increases for a number of years: this year, next year and maybe a couple of years after that. We expect more off-rental as well."
Vehicles sold at NAAA member auctions last year had a collective value of $75.7 billion, 2 percent higher than the collective value of the vehicles the association's members sold in 2012, the survey found.
But the average wholesale price per unit in 2013 was 2 percent lower than in 2012, Silver said.
Like the rest of the auto industry, auctions suffered as a result of the recession, which was deepest in 2008 and 2009. But unlike new- and used-vehicle retail sales, which started to rebound in 2010 and 2011, auctions' sales started to rebound in 2012.
That's because the auction business rises or falls about two to four years after changes in retail sales, when those vehicles re-enter the market as used vehicles, Silver said.
Since 2010 the association's members' annual unit sales have hovered between 7.7 million and 8.2 million.
That is down from annual unit sales of about 9 million to 10 million in 2000-09, NAAA's data show.
The survey findings are based on responses from 263 of NAAA's 325 North American auction members, including those in Canada. The survey was conducted for the association by CliftonLarsonAllen of Arlington, Va.
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