SANTA MONICA, Calif. — In a presentation to the National Association of Fleet Administrators (NAFA), Edmunds.com Chief Economist Dr. Lacey Plache and Senior Analyst Jessica Caldwell said that automotive market conditions may play out in favor of fleet managers in the second half of 2011.
“Declining consumer confidence, a struggling housing market and a stagnant unemployment recovery are the top economic factors that will restrict the retail automotive market in the second half of the year,” said Dr. Plache. “If those factors push enough retail demand into next year, automakers and dealers could turn to fleet sales to meet sales goals. In addition, fleet managers negotiating next year’s purchases may find themselves in a stronger negotiating position if automakers and dealers are concerned about the level of retail demand for next year.”
Companies can also expect to have more success selling their used fleets in a pre-owned vehicle market that has seen prices soar in the last year. According to Edmunds.com data, the average transaction price for a 3-year-old retail vehicle in July 2011 was $1,600 more than the average price for a 3-year-old retail vehicle in July 2010.
Edmunds.com’s analysts warned, however, that before fleet managers get too optimistic, they will have to see if retail consumers are willing to defer their demand further than they already have.
“Even in the middle of bad economic conditions, the buying conditions for new cars have actually been getting stronger,” said Caldwell. “Now that Japanese automakers are well on their way to recovery following the March earthquake, overall supply has increased and pricing is getting more competitive. Gas prices have also decreased over the last three months and interest rates are still very low for anyone who needs help with financing. The question now is whether these stronger buying conditions can motivate consumers in the face of rising economic headwinds, at least through the end of the year.”
A full slideshow of Edmunds.com’s presentation to NAFA is available upon request by contacting firstname.lastname@example.org.
For more automotive industry insight and analysis, please visit Edmunds’ AutoObserver.com at www.autoobserver.com.
Edmunds.com also offers 12-month trends for automotive brands and manufacturers in its data center at http://www.autoobserver.com/
About Edmunds.com, Inc. (http://www.edmunds.com/help/
Edmunds.com Inc. publishes Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web’s highest quality car photos and videos. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/