Domestic truck values are holding strong in the wholesale market, but expect them to start loosing ground over the next few weeks as vehicle manufacturers continue to release new incentives to spur full size truck sales. Evidence of price softening on the truck prices is seen in real time industry market reports which are a direct reflection of what is happening in the auction lanes. We use "softening" because there have been fluctuations from week to week albeit the trend is definitely downward. New buyers entering the market for the full size truck segment is flat or behind.

Although the SUVs and trucks are not experiencing the dramatic crash in prices like last summer when gas prices skyrocketed, the larger SUVs e.g. Suburban is experiencing market lows.

I will close on a totally different but equally important note; we have been advised that the Federal Trade Commission is conducting field investigations at dealerships in Tennessee. The field investigators are looking for violations of the Used Car Rule-i.e. the Buyer's Guide e.g. window stickers. Compliance checks are reportedly taking place now. Please be reminded that for the purpose of the Used Car Rule, demonstrator vehicles are "used vehicles," and, thus, must display a properly completed "Buyer's Guide" on the vehicle when it is available for sale.

--Robert Sullivan, General Managing Partner, Chattanooga Auto Auction

Source: Autodata Corp.

What does May sales data tell us about trends in vehicle segment buying?

• Cars were up 6% in May, light trucks up about 4%
• Crossover utility vehicles are the mega-hot segment now
• Were up 28% over May 2006
• Regular SUV segment was down 3%
• Pickups are still doing well - up 3.5% from a year ago
• Small cars doing best among the car segment

Source: Autodata Corp.

Domestic pickups still at top of sales list, but for how much longer?

• Interesting that Silverado is up so much but F Series is down
• Silverado was redesigned and launched this year
• Getting a lot of attention and buzz
• GM also scored with Chevy Impala - up 50% since last year
• The Prius had a huge month - up nearly 200% from a year ago
• Toyota Tundra also scored big - up 122% from last year

Source: LA Times, Edmunds.com, EPA, Autodata

Honda is pulling the plug on the Accord hybrid

• Its low sales volume isn’t worth the effort
• Its EPA mileage rating not much higher than non-hybrid version
• Prius is the clear leader in hybrid sales
• Camry is No. 2, but is far behind in sales volume
• The growth rates for Prius and Camry hybrids are strong this year

Two west coast AutoNation dealers have implemented hybrid and fuel-efficient vehicle marketing program:

• AutoWest Auto Group and the Power Auto Group, both based in California, are rolling program out
• The program highlights units that get fuel efficiency of at least 28 mpg
• Some of the specific vehicles company officials mentioned as being part of the program were the Toyota Prius, Tacoma, Honda Civic Hybrid, Chevrolet Malibu, Mercedes-Benz Diesel, Ford Escape Hybrid and Dodge Grand Caravan

Source: Edmunds.com

What’s happening with new vehicle incentives?

• Average incentive was $2,497 per vehicle in May
• Up $44, or 1.8% from April 2007
• And up $123, or 5.18% from May 2006
• Summer incentives hike has started
• Chrysler and Honda are up the most since May 2006
• Ford and Nissan have dropped incentives from a year ago
• Power Information Network reports that the large pickup segment is getting an incentive spike
• Greatest price decline was Chevrolet Silverado 1500, followed by the Toyota Tundra

Source: Auto Pacific, Auto Remarketing

How AutoPacific puts its ratings together:

• AutoPacific measures across 46 specific areas related to a vehicle's operation, comfort, safety and the overall purchase or lease experience
• Ratings reflect input from buyers and lessees of new vehicles acquired September through December 2006

And what is significant about them:

• Car ratings reflect broad range of domestic and import manufacturers
• Truck ratings are more domestic-manufacturer focused
• Hyundai is making a name for itself both in the car and crossover utility segments

Source: NADA; Internet Retailer; eMarketer

What is happening with dealers and online sales conversion?

• Local online advertising by automakers, dealers, and individual sellers will escalate
• Going up to $4.2 billion in 2011 - up from $2.3 billion in 2006
• Of the $7.8 billion spent on ads by dealers in 2006, Internet's share was 11.5%
• Although visits by car shoppers are on the rise, conversion rates are not
• Of the qualified leads these dealerships received - 52.9 in 2006, up from 29.5 in 2005 - conversion rate to sales dropped, from 26.4% in 2005 to 19.2% in 2006
• Prompt follow-up with prospects does not appear to be the issue
• Perhaps the responses themselves are turning away prospects
• While the Internet has speeded up response time, that greater speed can reduce, rather than improve, the quality of communication

Source: Kelley Blue Book

Data that will help dealers better understand consumer interior styling preferences:

• Kelley did Interior Styling market research study
• Interior styling continues to be important factor for car buyers
• It plays a significant role in overall cabin comfort
• Shoppers ranked based on overall comfort, headroom, and legroom
• Toyota finished first in 3 out of 7 vehicle categories
• Mercedes, Cadillac, and Lexus also did well in rankings

July 3rd:	Triad Financial, TitleMax, Auto Credit, Saturn of Chatt., Fairway Lending, Enterprise Rent-A-Car & Many More!
July 10th:	Honda Financial - 150+, GSA, Triad Financial, Auto Credit, Wachovia, Fairway Lending, Enterprise Rent-A-Car, TitleMax & Many More!
July 17th:	World Omni, Triad Financial, Auto Credit, Fairway Lending, Enterprise Rent-A-Car, TitleMax & Many More!
July 24th:	Honda Financial - 150+, Triad Financial, Auto Credit, Wachovia, Fairway Lending, Enterprise Rent-A-Car, TitleMax & Many More!
July 31st:	Triad Financial, Auto Credit, Fairway Lending, Enterprise Rent-A-Car, TitleMax & Many More!