Manheim: 2013 Q4 Showed Slight Dip in Used Vehicle Prices ...

Posted: 08 Jan 2014 12:00 AM PST

Manheim has reported that U.S. used vehicle prices declined slightly in the last quarter of 2013, but remained at historically high levels as consumer demand stayed strong.

According to Manheim, wholesale used vehicle pricing finished 2013 down 1.9% compared to the year-end levels of 2012. The findings were part of Manheim's quarterly Used Vehicle Value Index conference call held earlier today.

Despite the decline for the year, used vehicle values in 2013 were well above the levels of five years ago when prices started to rise. Used vehicle supplies began to increase last year — along with increased new car sales — but strong demand in the retail market kept prices from falling dramatically, says Manheim.

Attractive financing and increased employment allowed more consumers to purchase used vehicles. In addition, a disciplined approach by automakers and dealers to the new car market also helped used car values.

"Wholesale used vehicle prices continue to hold up better than many expected," said Tom Webb, Manheim chief economist. "Automakers and dealers showed restraint in their use of incentives on new vehicles, which helped maintain the value of used vehicles even as inventories increased. We also saw an increased emphasis on certified pre-owned vehicles, providing another boost to used vehicle values."

Year-end pricing for wholesale vehicle segments included:

Compact and midsize cars: both experienced pricing declines in the wholesale vehicle segment. Compact car pricing was down 1.3% and midsize car prices declined 3.3% in December year over year. Heightened competition kept prices down for both new and used vehicles in the compact and midsize car segments.
Luxury cars: posted the largest pricing decrease of any segment, down 3.8% in December compared to the same month last year. Automakers offered attractive lease terms for new luxury cars, which put price pressure on used vehicles as well.
Pick-ups and vans: both increased in pricing as the housing recovery continued to drive demand for these vehicles — largely used by small businesses for commercial work. Pickup pricing rose 3.4% and van pricing was up 1.2% in December year over year.
SUV and CUV: pricing continued to drop. A decrease in demand for large SUVs pulled down the segment. The market also had a greater supply of CUVs as automakers increased production of these vehicles for the new vehicle market. SUV and CUV prices were down 3% in December, compared to the same month last year.

Wholesale used vehicle prices should decline slightly in early 2014 but remain at healthy levels, said Webb. An increase in new car sales and off-leased vehicles will increase supply, but consumer demand should also remain high.

"We do not expect fundamentals to materially change in 2014, although a few missteps may occur along the way," Webb said. "In the first quarter, for example, it's possible that wholesale supplies may rise faster than expected, and those vehicle segments dependent on tax-refund-fueled demand may once again be disappointed by unpredictable, uneven and relatively low disbursements from the IRS."

Uber slashes the price of its private car hire service ... - The Next Web

Posted: 08 Jan 2014 12:50 AM PST

Private car hire service Uber has big plans in China — but it seems like the company is truly facing its toughest challenge yet in the market, after it announced that it has cut its prices in Shanghai by 30 percent, and slashed the base fare and minimum fare by half.

Uber is positioning itself as a premium service in Asia — where regular taxis are substantially cheaper — but this price slash could narrow the gap, as an email to its Shanghai users explains:

Uber is about being everyone's private driver, and that's what this is about. For less than the price of a latte, you can now have an Audi A6 waiting for you when you get outside to take you to work.

For example, a one-way trip to Shanghai Pudong International Airport will now cost CNY350 ($58), as opposed to CNY600 ($99) under the previous pricing system. Comparatively, a taxi costs approximately CNY150 ($25) from Pudong International Airport to People's Square, the center of the city, according to a China travel guide site.

Uber finally launched in China in August last year after it began a test phase in Shanghai, its first city in the country. It is also currently operating in two other Chinese cities, Shenzhen and Guangzhou.

An Uber spokesperson told TNW that the price cut affected only Shanghai this time round, as the company seeks to make "prices as accessible as we can for users while still keeping them high enough that partner car companies are motivated to use Uber."

When we learn more about the economics of the industry in new cities, we often see opportunities to adjust Uber prices; lower prices is a trade-off we will always take when we can.

We saw this opportunity in Shanghai as we have in Taipei, LA, San Francisco, and a number of other cities around the world in recent months.

China is an obvious target country for Uber, which is expanding globally aggressively, but it faces stiff competition there. Taxi finding services are on the rise in China, as shown by the recent $100 million funding round secured by Didi Dache, from investors that included Chinese Internet giant Tencent. Previously, e-commerce giant Alibaba invested an estimated $1 million in Kuaidi Dache in April last year, while car rental firm Yonchi — which runs Dache Xiaomi — was said to have landed a round in the 'tens of millions of dollars' bracket.

It isn't clear if Uber has cut its prices in Shanghai to gain a more equal footing to compete with rivals, or if the market is just very small at this early point and it is trying to reach out to customers more effectively.

Regardless, the presence of strong competitors, cheap taxi prices and regulatory obstacles make China a difficult market to crack — and it seems like to combat such issues, Uber is taking the obvious way out: to cheapen its services and hopefully appeal to a greater mass of people.

Headline image via Mark Ralston/AFP/Getty Images

Car Prices Blog

Thursday, 9 January 2014

Manheim: 2013 Q4 Showed Slight Dip in Used Vehicle Prices ...

Manheim: 2013 Q4 Showed Slight Dip in Used <b>Vehicle Prices</b> <b>...</b>

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