Industry Trends February - March 2021 - Merchants Fleet
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Industry Trends February – March 2021
U.S. Sales Volume by Month & SAAR
ACQUISITION 1,800
All Manufacturers
20
1,600 18
1,400 16
Total Sales (Thousands)
14
SAAR (Millions)
1,200
12
1,000
10
800
8
600
6
400 4
200 2
0 0
U.S. Sales Volume Seasonally Adjusted Annual Rate
U.S. seasonally averaged sales (SAAR) Complications relating to new-vehicle
fell 47.2% Y/Y early in the COVID-19 supply chain shortages (i.e., semi-
pandemic. SAAR in 2020 averaged a 14% conductor, foam), extraordinary
loss compared to 2019. However, even as weather conditions (ice storms in
economic conditions improve generally, southwest), and complex economic
industry-specific hurdles resulted in conditions contributed to February’s
February 2021 SAAR reflected a 6.1% 12.1% Y/Y fall in sales volume.
loss Y/Y.
Source: FRED; TD EconomicsDealer Inventory & Days of Supply
ACQUISITION
700,000 90
85
600,000
80
500,000 75
Average Days of Supply
70
400,000
# of Vehicles
65
300,000 60
200,000 55
50
100,000
45
0 40
Domestic Inventory (SA) Domestic Production (SA) Average Days of Supply
While certain OEMs have been impacted more Due to high demand, models like light trucks and
from semiconductor shortages, dealership cargo vans had order deadlines moved up and/or
inventory remains available for sedans and closed in Q1 2021 with little advance notice. The
large SUV models, averaging a new recession current average days’ supply for these vehicles
peak of 78 days’ supply as of the end of February. is no higher than 61 for pickups and as low as
30 for some SUVs. Dealers are not as eager to
Dealer inventory has not been properly
negotiate or sell inventory to fleet as they
replenished for several months, leaving some
historically have, instead selling at retail prices.
dealer lots barren of full-size trucks, cargo vans,
and other commercially focused vehicles.
Source: FRED; COX AutomotiveRESALE MARKET
WHOLESALE Manheim Used Vehicle Value Index
180
In-Progress 2021 Annual Average, 169.2
170
Index Value (1995=100)
160
150
2020 Annual Average 150.6
140
2019 Annual Average, 138.9 Index Value
130
Annual Average
120
The effects of COVID-19 reduced used and new Expanding shortages of vehicle
vehicle demand to a near halt in the early weeks of its production this year are expected to
grip on the U.S. economy. The associated idling of sustain or increase used vehicle
new-vehicle manufacturing caused a reactive spike in values, especially in the SUV and
used vehicle resale values that is now ratcheting back truck segment. This is an excellent
up due to component shortages. Used vehicles have time to remarket aging and
reached a new peak value in March, a change that underutilized units in your fleet.
is 24% higher Y/Y, 26% higher than 2019’s average
value, and 7% higher than August 2020’s peak.
Source: Manheim ConsultingRESALE MARKET
WHOLESALE Average Wholesale Price by Segment
$16,066
$15,742
$16,000 $15,327 $15,461
$14,937 $14,924
$14,504
$14,250
$14,037
$14,000 $13,527
$13,171 $12,971
Average Wholesale Price
$11,683
$12,000
$9,944 $9,820
$9,600
$10,000 $9,348
$9,014 $8,879 $8,989
$8,624 $8,484
$8,271 $8,363 $8,039
$8,000 $6,912
$6,000
Light Trucks & SUVs Passenger Cars
Auction values remain at record highs and The month of January stopped the decline in values
are trending up. The two top-level realized since the peak in August. Values realized a
segments of trucks and cars are +13.3% change of +4.7% for trucks and +6.0% M/M for
and +8.7% Y/Y, respectively. As these cars. Excluding compact cars, all segments have
auction results show, valuations have gained value in the wholesale market Y/Y. Compact
remained above average and are expected and full-size pickup trucks have gained the most
to hold or increase throughout 2021 due to value compared with pre-COVID market conditions,
critical component and material shortages in an increase of 52.9% and 26.4%, respectively.
new vehicle manufacturing.
Source: ADESA; KAR GlobalNational Average Cost per Gallon
Regular Grade & Diesel
$3.35
FUEL
$3.15
$2.85
$2.95
Price Per Gallon $2.75
$2.55 $2.39
$2.50
$2.35
$2.15
$1.84
$1.95
$1.75
Actual Gasoline CPG Forecasted Gasoline CPG
Actual Diesel CPG Forecasted Diesel CPG
U.S. fuel prices fell sharply Fuel is forecasted to follow a typical seasonal
after a drop in demand and rise in the spring of 2021. The EIA’s forecast
abundance of supply in the has already seen multiple forecast bumps for
spring of 2020. Prior to effects winter 2020-2021 from earlier predictions. Prices
from COVID-19, 2020 was in the near term are predicted to be the same for
generally projected to mimic gas and slightly lower for diesel compared to pre-
2019’s fuel pricing. COVID market conditions.
Source: U.S. Energy Information AdministrationInterest Rates
INTEREST
1.80%
1.60%
1.40%
Interest Rate
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
1-Month LIBOR 1-Year SWAP 3-Year SWAP 5-Year SWAP
The 1-Month LIBOR rate is Interest rates fell through the initial months of
currently at 0.11% and has held the pandemic. Due to sustained economic
below 0.20% since June. The 5- challenges, interest rates have remained
Year SWAP rate is trending at historic lows. However, upward trending
upward, currently at 0.89%. It was long-term indices signals a favorable time to
as low as 0.25% in August 2020. lock in still-low fixed rates.
Source: FRED; ICE Benchmark Administration LimitedYou can also read
