Who are these guys?
I was sent this article predicting lower wholesale prices in the second half of this year, yesterday, by one of our Performance Managers. The name of the company is RVI Group but I really can’t tell from their website how credible they are. I am curious as to whether anyone knows who these guys are.
RVI Group Predicts 2% Decline in Used Vehicle Values This Year
RVI: Used Price Growth Likely to Subside
By Joe Overby, Staff Writer
July 06, 2009
STAMFORD, Conn. — Although used-car pricing has shown somewhat surprising strength in the first half of the year, the RVI Group said it “remains cautious” about the growth and actually projects a year-over-year decline in used values by the end of 2009.
Furthermore, the company expects that a full recovery in used-vehicle pricing will occur in 2011.
“As the recent upswing in used-car prices continues, we remain cautious on near-term,” analysts explained in their quarterly report.
“Even with the increase in used-car prices in the first half of the year, we are forecasting 2009 to end at 2 percent below 2008 values, mainly from a worsening in economic conditions but also from an increase in our Used Vehicle Stock Index to 1.57,” they continued.
In fact, used supply has increased 43 percent from 2008 and RVI expects it to peak in the next few months.
After a “strong recovery” begins in 2011, RVI anticipates that 2012-2014 will show the largest increases in used-car pricing “as the economic recovery hits full-speed at a time when a record low number of three- to four-year-old vehicles hit the used-car market.”
That said, used prices have jumped more than 18 percent since December, RVI noted, citing the Manheim Used Vehicle Value Index. In May, for instance, used-vehicle values climbed 2.3 percent year-over-year.
Analysts attributed this upswing largely to credit-market conditions, which have been more favorable on the used side.
“Historically, we have never seen this. Yes, there is a relative shift from new-car purchases to used-car purchases during a recession, but this relative shift did not stop used-car prices from declining in the past,” officials explained.
“What we have now is a credit environment that is causing used-car purchases to not only be easier to obtain when compared to new cars, but also rates are quite attractive on the used-car side,” they continued. “Loan-to-value ratios for used vehicles have crept up to over 100 percent since November.”
Moving over to the new-car side, the market continues to erode, as 2009 sales are expected to be 9.5 million units. What’s more, RVI anticipates that the market won’t hit 16 million units sold until 2013.
On a positive note, however, the seasonally adjusted annual rate inched forward in May to 9.9 million, thanks in part to a slight improvement in consumer sentiment, according to RVI.
Continuing on, new-vehicle prices in May climbed 0.4 percent from a year ago and average incentives increased to $4,700.
Finally, discussing the lease marketplace, officials added: “Prices for leased cars and trucks are up 12.6 percent from last May as manufacturers continue to pull back from leasing.
“Lease penetration is down to 18.3 percent in the first quarter of 2009, down significantly from last year’s rate of over 23 percent for the same quarter,” they added.