JD Power CEO: Expect more activity in the used car market this year



let's take a closer look at the second half of the year for autos joining us now is Dave haba jerk he's JD powers president and CEO dave and we have had some soggy I guess you could call them auto numbers lately and we're trying to figure out what the what incentives are telling us about demand and the fact that the new auto market is just a bit a small part of the overall thing you know we've heard that the used auto sales are still pretty strong so how would you describe the state of things overall as we head into the back half hey Kelly well you know it's not as gloomy as it might sound this year we're gonna we're on target JD Powers analytics team is projecting a sixteen point nine million dollar sorry sixteen point nine million unit worth of cars being put into the market this year last year that was seventeen point three the good news for the automakers is that those those numbers might be a little low on unit volumes but the average sales price is still much higher than it was last year we're up three or four percent so net net its it looks like a good year for them is that sustainable Dave to see that we're showing it right now thirty three thousand dollars we've no we know of course about the pickup truck that's gonna carry the hundred thousand dollar price tag is this all because you know you can get pretty good financing terms right now and and what happens if those if those prices don't keep going up it is certainly financing and low interest rates dries those numbers if the if rates jump certainly those predictions will be lower and sales are going to drop I do think you're going to see though activity in the used car market if you look at the data that the team JD Power has put forth so far it's we've got a lot you know used car dealers are also pretty happy the the franchise new franchise dealers are selling fewer new cars but far more used cars than they have in last couple years and those tend to be at a higher higher higher price and certainly a higher margin you know speaking in the last couple of weeks to an to an auto retailer and I asked him how's business and he said I'm supposed to tell you business is good but it has slowed and we don't really know why why has it slowed again I don't know what retailer that is there are certainly some winners and losers in in the market you're seeing a fair amount of higher-end vehicles under pressure so you know the I think the simple story there is used cars are pretty good the car that's 2 years old and sold for 85,000 that now is 60,000 at retail as a used car that's a you know it's a pretty good deal and you might not buy the new car that said most franchise dealers would tell you that they're pretty happy right now again interest rates will have an impact on that but right now lower volumes are still let's say it's sixteen point nine we're at 2013 levels so last time we saw a sixteen point nine million unit year was 2013 still a pretty pretty large amount if you looked at historical trends Dave what's it looking like for electric car to man we know Tesla just moved quite a few vehicles of its own how big is that slice of the pie getting it's it's still a small number I mean V's are just under two percent last year of all vehicles with Tesla being roughly two-thirds of that number that said prices are getting you know to the point where its mainstream and miles are going up you know the average mile and electric vehicle is you know we're hitting 200 from most new manufacturers and Tesla's so this year you've heard from fill in others we expect out a Mercedes most of the manufacturers who are mainstream are launching vehicles they have the advantage of having the $7,500 tax credit so they have a they have a benefit that that Tesla won't enjoy this year but Tesla still is got mine share and they are you know clearly moving iron again small numbers were still under 2% but it's it's growing quickly you you

Author Since: Mar 11, 2019

  1. CNBC loves when anything Negative again Tesla !!!!! """ uhh" sound @ Tesla has no more tax incentive ?????

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