SAN FRANCISCO - Although used-vehicle sales are expected to be flat during the next five years, one of the nation's biggest auction companies foresees dealers taking a larger part of the pie.
In its 1999 Used Car Market Report, released Sunday, Feb. 7, at the National Automobile Dealers Associa-tion convention here, ADT Automotive Inc. reports used-vehicle sales for 1999 should mirror 1998 at about 40.2 million units.
But Tom Kontos, director of strategic planning and marketing research for the Nashville, Tenn., company, believes there is growth potential for dealers as they take market share from casual consumer-to-consumer sales.
For 1998, franchised new-car dealers and independent used-car dealers sold about 29.6 million used vehicles, up 150,000 from 1997. Kontos says that number should continue to climb, particularly as more used vehicles become available to franchised dealers.
'With so much leasing going on, the vehicles are coming back into the retail channel,' he said.
Although Kontos' forecast favors franchised dealers, independent used-car dealers saw most of the 1998 increase. Independents sold just under 13.7 million vehicles last year, up 120,000 from the year before. Franchised dealers sold 15.9 million vehicles, up 30,000 from 1997.
Not everyone is as optimistic as Kontos.
NADA Chief Economist Tom Webb expects franchised dealers to sell just over 12 million used vehicles in 1999, about the same as in 1998, if loan rates remain steady.
Art Spinella, an analyst with CNW Mar-keting/Research in Bandon, Ore., who provides ADT with sales figures for its data book, also sees a different future. He says several indicators show the used-vehicle market will probably be weaker in 1999.
For one, the image of used cars is on a downswing. In a survey of vehicle owners, CNW asked if driving a vehicle 2 to 3 years old diminishes the driver's image among co-workers, friends and relatives. In 1998, 19.4 percent of respondents said it did, compared with 16.1 percent in 1997 and 14.8 percent in 1996.
Spinella predicts the percentage will increase as long as new-vehicle prices remain flat.
CNW's dealership floor traffic index also shows traffic at used-vehicle lots is down slightly from a year ago.
In January, Spinella told an audience in Troy, Mich., that the auto industry had the potential to sell more than 17 million new vehicles in 2000, but warned that would cut into used-vehicle sales.
Kontos disagrees, noting automakers have to do something with off-lease and program vehicles. Said Kontos: 'It's in their interest to sell used cars as much as new.'