Kevin Chartier, vice president of Manheim Consulting, showed how data can provide actionable points that inform business decisions during his Aug. 18 presentation, “Strategic Insights That Drive Decisions.”

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Numbers mean nothing unless they add up and intersect in a way that helps businesses gain insights, increase productivity or improve operations.

Kevin Chartier, Vice President Mannheim ConsultingIn his presentation, Strategic Insights That Drive Decision Making, on August 18, he showed how data can deliver the kind of results that drive business decisions. He spoke during the International Automotive Remarketing Alliance Summer Roundtable in Nashville.

Manheim, which now has 22,000 dealers DealerTrack platform, can view comprehensive data across many industries and transactions. Additionally, about two-thirds of all consumers who purchase a vehicle touch Auto Trader or Kelley Blue Book along the way. Both brands are owned by Cox/Manheim.

Chartier offered a random set of observations and trends based on data about the state of the industry and market shifts.

No accidents ahead

He said the industry won’t see a major drop in resale value in 2022. Used car price growth outpaced new car prices in 2021, dwarfing new car price growth. One-year used cars rose in price by an average of 31%, and three-year-old cars by 35%. It is impossible to find vehicles aged from one to two years.

Drawing on data from 1995 that covered four major correction events, Chartier identified the auto market crash as caused by a slump in demand, an extreme oversupply of new and used cars, and aggressive incentives and discounts as dealers tried to clear inventory from the slump in demand.

“We don’t have such conditions today,” he said. “It’s highly unlikely that we’re going to have a crash unless there’s some unforeseen economic disaster.”

According to him, despite the fact that the steady demand for used cars has remained relatively unchanged since the spring, the monthly sales volume (by month) next year will increase compared to this.

There is no recovery either

Since the advent of COVID in 2020, the auto industry has produced eight million fewer vehicles in a market that needs 16.8 million vehicles, Chartier said. “The long-awaited production recovery has stalled and we are worse off at this time of year than at the beginning. We are nowhere near an oversupply of new cars.”

Inventory at the auction is about a third or less of normal volume. The only place for inventory is in dealer retail lots, with an average vehicle inventory of 48 days. Most dealers support 45-60 day deliveries. This means no incentive discount.

In 2021, used car prices will increase by an average of 33%, while new car prices will increase by 14%, he said. Prices for new cars on the market will be higher than usual (+9%), but prices for used cars are slightly lower than last year (-5%). Look for a limited long-term supply market through at least 2025 for new and used vehicles.

Rethinking car sales markets

Chartier said one of the major auto industry transformations taking place is the blurring of lines between the resale and wholesale markets. The Carvana-ADESA deal was “a major cannon shot in that direction, and they’re not the only ones doing it.” OEMs are also getting in on the action, and “if you don’t understand how the retail market works, you’re going to have problems.”

This means that vehicles can be displayed as consumers will see them during the evaluation. “If you’re going to play in this new world, you have to learn how to play retail. You have to become smart and sophisticated as dealers.’

AI image protection and high-definition images will automate damage detection, leaving no doubt among those best-in-class images that buyers will zoom in on, Chartier said.

“Now, different writers of state reports on different days will rate differently. The digital image is sequential. Now you have inspectors reading the images and feeding back the information.”

According to his estimates, about 75% of damages are estimated with the help of artificial intelligence, which will improve the accuracy of the data, create more opportunities for them and make new insights that expand the possibilities of making business decisions.

Trying to make sense of the vast amount of data coming in from all over the place, Chartier reminded the audience, “Data by itself isn’t very interesting unless it helps you do something useful.”

Originally published on Remarketing of cars

https://www.autorentalnews.com/10181802/useful-facts-and-insights-derived-from-remarketing-data

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