McKinsey’s auto retail micro-market model (ARM3) for used-car demand in the United States estimates that Americans buy 39.4 million used cars each year, versus 17.3 million new ones (2018), and that used-vehicle sales will increase faster than new-vehicle sales over the next five years. CarMax retailed 721,512 used vehicles in 2018. “2018 car buyer journey study,” Cox Automotive, January 28, 2018, coxautoinc.com. When we asked customers what they care about most when making used-car purchases, a clear hierarchy in the general population emerged (Exhibit 5). Subscribe Now. Please click "Accept" to help us improve its usefulness with additional cookies. The total U.S. industry market size for Used Car Dealers: Industry statistics cover all companies in the United States, both public and private, ranging in size from small businesses to market leaders.In addition to revenue, the industry market analysis shows information on employees, companies, and average firm size. navigate COVID, Baidu to build intelligent-driving project in Chengdu, Antolin forms auto electronics JV with Shanghai company, Polestar appoints new leader for China, Asia Pacific, Sales rally in February but volume trails pre-pandemic levels, The industry is racing to modernize the way in which EVs are built, As EV output explodes in China, e-axle drive assembly automates, Plus to roll big rigs on a ‘continuum' toward self-driving future, Lidar moves beyond vehicles to underpin a reimagined logistics chain, Utilities in South, Midwest to build more EV chargers, Honda to prep 2 EVs developed with GM, rededicate itself to hybrids, Bollinger to begin deliveries of SUV, pickup, 2 chassis-cab models in 2022, Uber, Lyft agree to share information on banned drivers in safety push, Ford of Europe repositions for EV-focused future, Next supply issue: Foam shortage on the horizon, NISSAN: 2022 Pathfinder and 2022 Frontier, The new Stellantis pickup: Schrödinger's Dakota, Fisker gets a rare second chance to build his own car company, Gerry McGovern is right man to steer Jaguar reinvention, Forget the Ford GT; Moray Callum's biggest hit is the aluminum F-150, March 9, 2021 | An electric storm is moving in, February 23, 2021 | Reliability continues to soar, February 16, 2021 | Apple looks to take bite out of automotive, Prosecutors show an unsettling path to save Chrysler, Automation doesn't mean personalization ends, The Darwinization of auto retail is coming, Why Geely wants to be a contract manufacturer, Shanghai hints at how Chinese cities will pursue electrification, How Tesla, GM transformed EV market in 2020, Lean lots won't last without new dealer discipline, Chip shortage shows need for new thinking, Digital demands squeeze smaller auto retailers, AutoNews Now: 'They care deeply': Next-gen Ford family members nominated to board, AutoNews Now: Toyota boss to Apple: The auto industry is tough, AutoNews Now: Nissan promotes N.A. Learn about More stable, more countercyclical, and arguably more profitable than the new-car market, the big but predictable used-car industry will soon diverge from its traditional path. Car manufacturing robots reduce part-to-part variability. McKinsey’s auto retail micro-market model (ARM3) for used-car demand in the United States estimates that Americans buy 39.4 million used cars each year, versus 17.3 million new ones (2018), and that used-vehicle sales will increase faster than new-vehicle sales over the next five years. Used-car buyers spend about 40 percent more time researching online during the buying process than do new-car buyers, who spend fewer than seven hours, on average. According to engineering.com, today there are more robust technologies for automotive 3D printing, such as fused filament fabrication (FFF), which can be u… Protecting gross profits in the digital age also requires special modifications. 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National Automobile Dealers Association data. Power. Search from 30175 Used cars for sale, including a 2012 Toyota Prius C Four, a 2013 Nissan Leaf SV, and a 2014 Honda Civic LX Sedan ranging in price from $650 to $673,888. and delivery and logistics (how does a player deliver vehicles to its customers without breaking the bank?). Auto-related suppliers are … 13-Month Rolling Used-Vehicle SAAR 03/04/2021 As another data point to monitor the health of the automotive market, according to Cox Automotive estimates, total used-vehicle sales were down 3% year over year in February. The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America. That reduces waste previously caused by human error, and it also means less variability in car assembly. At minimum, that will require leading-edge photography technology, solid user-experience design, and superb back-end systems. So what can you expect in 2020? Used car shopping can be daunting, but CARFAX is here to help! Within the used-vehicle market, the supply of mass-market-brand vehicles is expected to dwindle slightly beyond 2020. Carvana notes that CarMax, the biggest used-vehicle retailer, has roughly a 2 percent share of the market. This spells opportunity for disrupters and traditional retailers. The organization’s 2018 report says that the automakers in the country have exported vehicles and parts worth over $692 billion over the past five years. Power, dealers made an average gross profit of just $140 on a mass-market new car this year. "The primary driver behind that: We're expecting credit conditions to worsen," he said. The digital revolution is disrupting used-car retailing—for the better. Driving the automotive customer experience toward the age of mobility. Used cars offer a relatively countercyclic… tab, Engineering, Construction & Building Materials, McKinsey Institute for Black Economic Mobility. Power. CoVid-19 : Auto Industry News. According to J.D. While automakers are the most visible part of the industry, auto manufacturing encompasses many diverse businesses coast to coast. Learn more about cookies, Opens in new Off-lease supply is at a "high tide for the wholesale market," Smoke told Automotive News in an email. Because customer preferences can vary so much across segments and geography, used-car retailers need to identify specific customer attributes and know how to attract and sell to them. "But on the premium side of the market, with leasing and all the crazy deals that we've seen over the past couple years, we're actually expecting supply levels to kind of maintain in 2020, with similar levels that we saw here in 2019, and then actually grow by 2022," Paris said. As more used-car customers begin to expect the same seamless digital service they receive in other retail environments (either as table stakes or leading-edge innovations), preowned-vehicle retailers need to adapt so that they can maintain their competitiveness while protecting profits, especially finance and insurance (F&I) margins. Digital upends old models. You can unsubscribe at any time through links in these emails. Retailers can find ways to use the digital-oriented used-car buyer’s desire for advanced technology to their advantage in the sales process. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. The year 2019 was the first in which SUVs, crossovers and pickups combined to outnumber cars in off-lease returns, according to Edmunds. Additionally, customers are purchasing more protection products, such as extended warranties, to limit their financial risk if their used cars break down. Find the latest news, videos, and photos on the nation's auto industry on NBCNews.com. ISSN 2576-1064 (print) However, a new wave of tech-savvy customers, accustomed to the service levels of big online retailers, are demanding more innovative features, like an end-to-end transaction, home delivery, and advanced search and recommendation features (for example, by lifestyle, driving style, or other attribute). Demand for used cars from mass-market brands will continue. Find great deals at Industry Motors in Sacramento, CA. As a result, 45 states have more than 10,000 auto-related jobs, and 20 of those states have more than 100,000 auto jobs. For example, more customers are choosing full-size pickup trucks and midsize or larger SUVs among three-year-old vehicles, causing prices to rise 4.0 and 2.2 percent, respectively, between 2012 and 2017. We'll email you when new articles are published on this topic. The implications of the digital trends discussed here will be different for each type of used-car-industry player. See more newsletter options at autonews.com/newsletters. After a peak of 4.1 million off-lease vehicles came back to the market in 2019, Cox Automotive Chief Economist Jonathan Smoke is forecasting that inventory levels in 2020, in aggregate, should be fairly stable to only slightly lower. According to J.D. It is expecting only a "slight decline" in overall inventory levels, said David Paris, executive analyst at J.D. As a result, to generate a uniformly distinctive and differentiating customer experience, all used-car retailers must identify their target customer segments and rapidly develop the best approaches among a growing array of available options. J.D. In contrast, established digitally savvy dealers should marshal their existing capabilities to create a seamless omnichannel experience for customers by improving real-time competitive-intelligence and digital-marketing capabilities. There has been an increase in financing penetration as customers use credit to avoid laying out cash to meet higher used-car purchase prices. For the past few decades, 3D printing in the automotive industry was primarily used by carmakers to create automotive prototypes to check their form and fit. ISSN 2576-1072 (online), Manheim spending nearly $100 million in 2021 on auction improvements, Shift posts record top-line growth, narrower loss in Q4, Hertz lenders push alternate plan for bankruptcy exit, report says, Sponsored Content: Auto Insurance Trends for 2021: What Dealers Need to Know. There are several new online entrants that are doing this particularly well and have been driving customer expectations up, in comparison with traditional brick-and-mortar stores. The share of light trucks in the used-vehicle market will continue to grow in 2020, Edmunds said. For instance, with customers doing more online, dealers need to protect the F&I opportunities that traditional purchasing processes offer. Read car news from the auto industry including auto shows, latest vehicles, future cars and more "We're going to continue to see strength in passenger cars, primarily mainstream, just because of shrinking levels of inventory coming back," said Paris of J.D. We now know that it’s the third most common element in the Earth’s crust, and the most common metallic element on Earth. It's clear: The used-vehicle market is hot, and competition is on the rise. The US used-car market is more than twice the size of the new-car segment and is outpacing it in growth. For example, they want retailers to do the following: Each one of the described moves comes with its own set of considerations. Something went wrong. 2 People create and sustain change. Repossessions also are expected to rise because of record loan volumes and a higher rate of severe delinquencies. In addition to cars, dealerships commonly offer parts and accessories, maintenance and repair services, financing plans, extended warranties, and insurance. FENTON TOWNSHIP, Mich. (AP) — The viral pandemic has triggered a cascade of price hikes throughout America’s auto industry — a surge that has made both new and used … Used-car prices are rising due to the richer mix of available SUVs and pickups (Exhibit 3). We believe the disparity results from several important drivers: Ultimately, these differences arise from the nature of used versus new cars: customers usually assume any new car of a given model is largely the same in quality and reliability and has strong brand backing. Gundies is a state-of-the-art facility that leads the Pacific Northwest auto recycling industry in supplying highest-quality used parts to insurance companies, auto body and collision repair shops, and individual customers. Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Our flagship business publication has been defining and informing the senior-management agenda since 1964. New digital retailing platforms are a possibility. The authors wish to thank Vinit Doshi for his contributions to this article. And new trucks cleared $540 each, while used trucks 5 years old or less gave dealers a $1,200 per-vehicle profit. The first technology for building parts was selective laser sintering or binder jetting. Used Car Dealers in the US industry trends (2015-2020) The Boatbuilding and Repair Services industry has grown over the past five years, despite challenging trading conditions. The index is not inflation-adjusted, because it constantly evolves to reflect the changing mix of vehicles sold at Manheim auctions, Smoke added. Brick-and-mortar dealers can still win in some critical nondigital areas, such as test-driving and servicing. Additional Information See a problem? Unleash their potential. We estimate that the number of used vehicles three years old or less will increase from 51 percent of the total in 2017 to about 60 percent in 2022. New digitally fluent entrants—such as Carvana, Fair, and Vroom, among others—are attempting to disrupt the industry. See good deals, great deals and more on Used Cars in Seattle, WA. Select topics and stay current with our latest insights, By Ben Ellencweig, Sam Ezratty, Dan Fleming, and Itai Miller, Used cars, new platforms: Accelerating sales in a digitally disrupted market. Power. Automobile Dealers New & Used, Trailers Auto Utility Sports Etc All Volvo Auto. A key part of this age shift will likely result from the greater supply of off-lease vehicles, many of which fall into the category of newer certified preowned (CPO) vehicles. We estimate the February used SAAR to be 38.0 million, down from 39.4 million last February and flat compared to January’s 38.1 million rate. In … "Definitely behind the scenes, we're seeing multiple players working on that," he said. For example, building a transparent, no-haggling pricing model will require advanced pricing practices, great competitive intelligence, and high-quality data. It’s been used by human civilization since ancient times. In the auto industry, for example, the pandemic still threatens the supply chain that feeds assembly plants in the United States. These factors, along with the credit differences, encourage them to do more research and trust their own findings. hereLearn more about cookies, Opens in new For more information, see our Privacy Policy. New car and light truck unit … “It’s about time: Streamlining in-store processes to improve the customer experience,” Cox Automotive, November 2014, coxautoinc.com. In 2020, the company forecasts that 15.28 million vehicles in that age group will come back to the market. Top car stocks of 2021. As revealed by our proprietary customer research, online providers are beginning to dilute traditional used-car dealers’ positions and drive growth by empowering digitally savvy customers via three major capabilities: With the rise of digital players and potential incumbent-dealer consolidation on the horizon, the evolving market will feature new threats and opportunities for players trying to capture value in an already competitive environment. Used cars are usually overlooked in the fanfare accorded to cutting-edge electric cars and gussied-up pickup trucks. Hence, while the prices of used three-year-old midsize and compact cars declined 1.3 and 1.6 percent, respectively, the overall used-vehicle-market average transaction price increased 2.7 percent. Market Size & Industry Statistics. 1 This new wave of digital retailing represents more than technology alone because it focuses a spotlight on the importance of the customer experience in the used-car-buying process. For example, they could offer digital assistants, videos, and guided F&I-selection processes to enable easy access to car specifications, quality reports, inventories of selected vehicles, benefits of various products, and other detailed information to help shoppers make an informed choice. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. With declining credit conditions on the horizon, plus a shrinking gap between the features found in mass-market and premium vehicles, there likely will be further downward pressure on premium vehicle prices, Paris said. See good deals, great deals and more on Used Cars in Redmond, WA. Please select at least one newsletter to subscribe. Traditional dealers also have a strong incumbent position compared with new digital entrants and can benefit more from servicing revenue, which new digital entrants have yet to figure out, potentially adding $610 per vehicle, according to McKinsey’s proprietary aftermarket-model estimates, which include part replacement, inspection, and fluid maintenance. These “table stakes” include the option to test-drive and inspect the vehicle and the ability to obtain multiple clear photos of it, along with detailed, factual data on elements such as service maintenance and accident history. The market has seen a strong shift toward later-model vehicles. Report from Cox Automotive examines trends and provides advice for dealers managing growing industry headwinds LAS VEGAS, March 23, 2018 – Used cars should experience strong demand and growth in sales across the U.S. in 2018, as the economy continues its strong performance, while new cars may see a slight downtick as industry headwinds become … Continued