Tag Archive | "Kelley Blue Book"

KBB Sees Used-Vehicle Values Rising Early Next Year

IRVINE — Kelley Blue Book is encouraging visitors of its site who are in the market for a used car to buy before the end of the year, as it expects values for used vehicles to jump 4 to 6 percent in early next year.

Used-vehicle values dropped 2.6 percent overall in October, marking the fifth consecutive month of declines. And since peaking in June, used-vehicle values overall have dropped 10 percent, with values for fuel-efficient vehicles experiencing a significant 20 percent decline, reported F&I and Showroom magazine.

Analysts at the vehicle information site added that the car market has experienced a substantial cooling now that new-vehicle inventory levels, especially for Japanese automakers, have started to return to normal levels and fuel prices have dropped.

“Considering the already significant declines in used-car values since June, Kelley Blue Book predicts that values will decline an additional 3 to 4 percent by the end of the year,” said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book. “Used-car values typically decline through the fourth quarter due to a seasonal drop in demand that lasts through the holiday season. We believe sales volume also will decline through the remaining fourth quarter, similar to years past, and as a result values will likely remain soft through year-end, with few exceptions.”

Although values are expected to decline in the fourth quarter, Kelley Blue Book analysts predict sales will pick up early in 2012. Projections for 2012 show values bouncing back in the first quarter of the year.

“Since 2009, used-vehicle registrations in the first quarter have increased by 15 to 20 percent on average from the preceding fourth quarter, and since we expect a similar increase in demand in 2012, a lack of supply will likely put upward pressure on values early in the year,” said Gutierrez. “Since we expect fewer leases and trade-ins replenishing supply, values will likely increase across the board as supply struggles to keep pace with demand.”

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Toyota Wins KBB’s Best Resale Value Brand Award

IRVINE — Kelley Blue Book’s 2012 Residual Analysis Report showed that Toyota’s entire lineup for 2012 is expected to retain the greatest amount of its original value after five years. The results of that analysis led KBB to name Toyota and its Lexus brand as 2012 winner of the site’s

Both brands regain the titles they claimed from Kelley Blue Book back in 2010. Across its fleet, Toyota improved its 60-month average residual value by 2 percentage points compared to its 2011 average, allowing the company to best last years’ winner, Subaru, and a few others for KBB’s award, reported F&I and Showroom magazine.

“Despite Toyota’s success in the 2012 residual rankings, the company lost market share in the U.S. due to its supply shortage following the earthquake and tsunami in March 2011. The challenge for Toyota next year will be to regain this share without depressing its residual values,” said Eric Ibara, director of residual consulting, Kelley Blue Book. “A number of actions that could quickly increase sales and market share also could jeopardize its residual value crown, including over incentivizing and increasing daily rental volume. Clearly, Toyota’s actions through the next year will be pivotal in shaping its future direction.”

Based on vehicle sales and overall economic factors, Kelley Blue Book’s 60-month residual values for 2012 model-year vehicles are forecasted to average 35.5 percent of their original MSRP after five years of ownership, up just 1.5 percentage points from last year. The 60-month residual value increased by 0.9 percentage points for the light-car segment and 3.0 percentage points for the truck segment.

With the exception of vans and hybrid utilities, the average segment residual value for all truck segments, including SUVs and full-size trucks are projected to be higher than the average residual value in every car segment, except for high-performance cars, according to Kelly Blue Book. The truck segment is projected to maintain 38 percent of its value after 60 months, while the car segment is expected to maintain just 34 percent. Only two segments, the near-luxury segment and the sports-car segment, declined on a year-over-year basis.

Gas prices and catastrophic natural disasters played a significant role in new-vehicle sales and strong swings in vehicle segment preference throughout the year, according to Kelly Blue Book. Other key factors affecting the future values of 2012 model-year vehicles include unemployment, a stagnant housing forecast and some of the lowest consumer confidence numbers seen in decades.

The unemployment rate remains at 9 percent heading into 2012, but forecast have the rate dropping to 8.7 percent next year. Those that are out of work are finding it more difficult to find jobs, with an average 41 weeks unemployed, according to the company.

Kelley Blue Book projects that 2011 will close with 12.5 million vehicles sold, a one million-unit increase from 2010. A similar increase is projected for 2012.

As the Japanese get back into full production in the new year, KBB said it expects a pickup in sales activity as consumers waiting on the sidelines get back into the game. With an expectation for some increased consumer spending, Kelley Blue Book is forecasting 13.5 million in vehicle sales for 2012.

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Hyundai Maintains Top Spot for Brand Loyalty on Kbb.com

IRVINE — Kelley Blue Book reported that Hyundai upheld its No. 1 spot for brand loyalty in the third quarter on Kbb.com for, marking its second consecutive quarter on top.

Hyundai’s brand loyalty was at 48 percent, with Toyota nearly closing in at 47.9 percent and Subaru at 45.9 percent, according to Kbb.com. Rounding out the top-five brands for the quarter were Kia in the fourth spot at 45.3 percent and Ford in fifth at 45.2 percent.

While Hyundai continues its lead in brand loyalty, it dropped 4.4 percentage points from the previous quarter. KBB analyst attributed the decreased to cooled interest in the Sonata and Elantra models.

For the first time since Kelley Blue Book began tracking loyalty, Honda didn’t make it into the top five, sitting in the sixth spot at 44.2 percent. Analyst attributed Honda’s absence from the top 5 to a lukewarm reception of the 2012 Civic. Honda’s perceived supply issues also have influenced shopper activity in the third quarter.

While the majority of automakers still show declines in year-over-year loyalty, a quarter-over-quarter shift into the black reveals that consumers may be taking notice to seasonal blowout deals and loyalty incentive offers. Manufacturers also have released the majority of their 2012 models, potentially narrowing consumers’ shopping choices as they become familiar with the options available in the marketplace.

“The latter half of the year tends to draw interest toward sport utility, crossover and other large vehicles due to weather conditions and seasonality,” said Arthur Henry, market intelligence manager for Kbb.com. “Since Hyundai’s flagship vehicles are its compact and mid-size sedans, it is natural that it suffers in this regard.”

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Honda Civic, Hyundai Elantra Win Kelley Blue Book Test

Detroit’s automakers are finding it hard to dislodge the Asians from the top ranks of the compact sedan segment, according to a comparison test by Kelley Blue Book, the car pricing experts.

The compacts available in the United States are all significantly better, more fuel-efficient and more pleasant to drive than they were even five years ago, said KBB analyst Jack Nerad.

In a test of comparably equipped Hyundai Elantra, Honda Civic, Ford Focus and Chevrolet Cruze sedans, the Civic and Elantra tied for first place, the Focus was third and Cruze fourth reported The Detroit News.

“If this were a beauty contest, or a price war, the 2011 Hyundai Elantra would win it hands down,” KBB said Wednesday.

But the Civic matched the Elantra — with a 7.5 score out of 10 — because of its superior showing in the performance and value categories. “They pretty much got everything right — the seating position, ergonomics, fit and finish, driving dynamics and ride quality,” Nerad said. “It’s a very well-balanced, good package.”

The Civic has been one of the top sellers in this segment for years. But the redesigned car’s launch was severely disrupted by the March earthquake in Japan, and it has drawn mixed reviews, including a poor write-up of the Civic LX by Consumer Reports.

Detroit’s automakers are fielding strong contenders now in the segment. The Ford Focus won praise from KBB as the most exciting car to drive of the four, while the Cruze gives passengers “the sense that they’re in a larger car, when they’re in a small fuel-efficient car,” Nerad said.

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Kelley Blue Book Says Used-Car Prices Are Expected to Remain High for Years

With used-car prices at historic highs, customers hoping for those prices to decline may have to wait years for a reprieve.

Prices for used cars are likely to stay high for the next two to three years, according to a report released Thursday by Kelley Blue Book, which tracks new- and used-car prices, according to The New York Times.

The service attributes the sustained strength of used-car prices to a gradual decline in new-car sales dating to 2008, as well as a drop in the number of leased cars becoming available at the end of their contract terms.

The report said that the price of the average one- to three-year-old used vehicle was rising 15.8 percent per year. In 2008, the average cost of a one- to three-year-old vehicle was $15,042, but now the average is $23,353, according to the report.

Many in the industry, Kelley Blue Book included, had claimed that used-car prices peaked late this spring. Forecasters had said that healthier new-car inventories, aided by the recovery of production capacity in Japan after the March earthquake and tsunami, as well as lower fuel prices, would lead to a sales uptick in showrooms and, subsequently, more trade-ins and private sales of used cars.

But showroom sales remain sluggish, and analysts now are concerned that volatility in the financial markets and sustained high unemployment may encourage potential buyers to hang on to their vehicles rather than buy new ones.

Daniel F. Akerson, the chairman and chief executive of General Motors, expressed skepticism earlier this week that total new-car sales, across brands, in the United States this year would reach the company’s forecast of 13 million vehicles. July sales suggested an annual selling rate of about 12.2 million units.

For those who can afford to part with their cars, particularly compact and midsize models, the selling environment is optimal.

Manheim Consulting, which follows used-car sales, says the average price of a small car rose 16.7 percent in July compared with the same period a year ago, while the average price of a midsize car was up nearly 12 percent.

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Toyota Returns To Top In Kelley Consideration Study

Toyota is once again the most considered auto brand among new-car shoppers, according to a new Kelley Blue Book study.

The third-quarter Market Intelligence Brand Watch study indicates that 25 percent of new-vehicle shoppers who visited kbb.com showed interest in Toyota. The Ford and Honda brands followed close behind with 24 percent and 23 percent interest, respectively.

Between the first quarter of 2007 and the third quarter of 2009, Toyota topped all other brands in all vehicle segments, but then fell to second place between the fourth quarter of 2009 and the second quarter of 2010. This coincided with the start of the company’s global recall crisis — which ultimately involved more than 15.4 million vehicles over a year — and allowed Ford to take the top spot, reported Automotive News.

For the third quarter of this year, Toyota also was most considered in the nonluxury sedan/coupe/hatchback category and in the nonluxury SUV/CUV category. Toyota’s trucks also have gained considerable attention, although they still trail Ford, which has seen a surge in interest since the second quarter of this year.

Bob Carter, sales chief for the Toyota brand in the United States, said in statement today that the study is a “strong indication that consumers recognize our commitment to earn their confidence in the safety, quality and value of our vehicles.”

James Bell, executive marketing analyst for kbb.com, says the numbers support Toyota’s recovery from its “public perception crisis,” but it may not mean a complete turnaround.

“Whether Toyota will ascend as high as it was before the recall crisis remains yet to be seen,” he said in a statement. “Hot competition from the likes of Ford, Honda, Chevrolet, Nissan and Hyundai could make it very hard for Toyota to keep a strong lead moving forward.”

Factors to consider

The brand watch study also asked new-car shoppers to rank their top five factors when considering a vehicle purchase. For the third quarter of this year and regardless of segment, shoppers are most interested in durability/reliability, fuel efficiency, driving comfort, driving performance and safety. Interest in these factors changed depending on the vehicle segment.

For nonluxury sedans, coupes and hatchbacks, the brands that generate the most interest are Toyota, Honda, Ford, Hyundai and Nissan. For the first time, Mitsubishi was the top-rated brand for vehicle image or “cool factor.”

For the nonluxury SUV/CUV segment, Nissan and Jeep saw interest increase during the third quarter, while Subaru made its first appearance as a top-ranked brand for safety and versatility/flexibility.

For luxury sedans, coupes and hatchbacks, BMW took the top spot, followed by Lexus, Audi, Acura and Mercedes-Benz. Despite its fifth-place ranking, Mercedes-Benz continues to take top honors in most of the factors important to people looking at this segment. These include driving comfort, safety, interior design/layout, luxuriousness/sophistication, prestige/brand status and family friendliness.

For luxury SUVs and CUVs, Lexus remains at the top, even though consideration of the brand has been lessening in the past few quarters. Trailing Lexus are Acura, Cadillac, Lincoln and BMW.

In the minivan segment, Honda continues to reign, but domestic automakers Chrysler and Dodge saw a slight increase. They were the only minivan brands showing increased interest from the second quarter of 2010.

In the truck segment, the most important factors were durability/reliability, fuel efficiency, towing/hauling capacity, driving comfort and safety. This was different from the previous quarter, when shoppers were more interested in driving performance than safety.

The study surveyed more than 2,700 in-market new-car shoppers on kbb.com between July 8 and Sept. 23. Kelley Blue Book has been conducting the brand study since 2007.

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