Laurence Dixon's Articles

Summer Weather to See Economy Bounce Back

The U.S. economy was battered even more than first suspected by the harsh winter, actually shrinking from January through March. The result marked the first retreat in three years, but economists are confident the downturn was temporary. According to the Commerce Department, gross domestic product contracted at an annual rate of 1% in the first quarter. That was worse than the government's initial estimate last month that GDP during the period grew by a slight 0.1%. The economy last posted a decline in the first three months of 2011 when it dropped 1.3%. The  ...

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Mid-Size Car Deals Should be Especially Sweet in May

Long the preferred choice for consumers looking to strike the perfect balance between practicality and affordability, mid-size cars have fallen on tougher times as of late as new sales for the group have fallen by 11% over the first four months of the year – the most of any segment. The primary driver behind the decline in deliveries: competition from other segments. Today’s compact car is big enough to comfortably accommodate small families, has amenities comparable to its larger cousin, and comes with a price tag thousands of dollars less. The bigger problem for the segment ...

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2014 NADA – J.D. Power Automotive Forum Highlights

I’ve attended the majority of the Automotive Forums sponsored by NADA and J.D. Power held in conjunction with the New York International Auto Show over the past four years; however, the conference’s fifth showing was likely the most informative and thought-provoking thus far. Since a full day of presentations and panel discussion left too much usable content to be shared in a brief blog post, the following are condensed points and comments I found to be among the most interesting made during this year’s forum. Note that while many of these were derived from statements made ...

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GM Ignition Recall and Wholesale Auction Prices

On Feb. 10, GM announced a recall of model year 2005-2007 Chevrolet Cobalt and 2007 Pontiac G5 vehicles due to ignition switches that could inadvertently be switched off from too much weight on the key ring or jarring road conditions, factors that could cause the engine to shut off and prevent airbag deployment in the event of a crash. A series of fatalities linked to the defective ignition switch prompted GM to issue the recall and the automaker has since associated 12 fatalities to the problem. Two weeks later, GM increased the recall to include model year 2006-2007 Chevrolet HHR ...

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U.S. EIA’s Latest Report Contains Important Implications for Alt-Powered Vehicles

Recently the U.S. Energy Information Administration (EIA) released an early version of its “Annual Energy Outlook” report for 2014 (AEO2014). Each year the organization publishes a long-term energy assessment that is intended to be used “as a starting point for analysis of potential changes in U.S. energy policies, rules, or regulations or possible technology breakthroughs.” Contained within the pages of the early AEO2014 release are numerous projections that deal with the EIA’s reference case (or the most probable forecast) for energy market trends, which shou ...

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Mid-Month Used Price Update: Prices Slip by 0.7% over the First Half of December

Used vehicle depreciation for units up to eight years in age dropped by 0.7% over the first half of December, which is a trajectory in line with NADA’s full-month forecast of 1.5%. Should the month finish as expected, used vehicle prices will end the year 0.5% higher than 2012’s record high level; in addition, depreciation would be on par with what has been recorded for December over the past few years (excluding 2012’s abnormally strong result stemming from Hurricane Sandy). Across segments, depreciation has largely fallen within a tight range of 0.2% to 0.7%, with co ...

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November Mid-Month Update: Used Vehicle Depreciation Slows Considerably

After diving by 3.5% on a prior month basis in October, used vehicle depreciation eased up substantially over the first half of November with prices falling by 1.2%, a figure in line with NADA’s full-month target of 1.5% to 1.75% and one dramatically better than October’s mid-month fall of 3.1%. At the segment level, mid-size van prices have firmed up the most with depreciation improving to 1.6%, up by more than three percentage points from October’s full-month loss of 4.7%. The stabilization in mid-van prices has come despite 2013 model year volume increasing by 32% or 52 ...

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Sonic’s Stand-Alone Pre-Owned Program: Another Factor to Support Used Vehicle Prices

There are numerous factors currently helping to sustain used vehicle prices at historically high levels: economic improvements, relatively tight supply, greater certified pre-owned awareness and an extremely favorable credit environment. But an often overlooked factor is the increased focus that dealers have on improving used vehicle operations. Sonic Automotive’s announcement this week that they will be opening numerous stand-alone pre-owned stores exemplifies this trend. Once considered something of a nettlesome by-product of new vehicles sales, used vehicle operations have assumed a more ...

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Plug-in EVs: ABC News Leans on NADA Data for Guidance

As reported recently by ABC News, automakers have sweetened deals in recent months for plug-in electric cars to help boost sales and move vehicles off dealer lots as the year comes to an end. General Motors knocked 13% off the sticker price for the Chevrolet Volt this summer, while earlier this year Nissan dropped the price of its electric Leaf, offering a three-year lease at $199 a month. Leasing offers mutual benefits for the lender, consumer, manufacturer and dealer: lenders can get a federal tax credit, which they cannot do in a loan arrangement. This helps to reduce monthly payments ...

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Credit Conditions in Perspective: A favorable credit environment is helping to fuel auto sales

Much has been made of the role pent-up demand has played in the recovery of new and used auto sales – and to a lesser extent, the strength in used vehicle prices – over the past year or so. Slightly less trumpeted has been the progressively important part credit has played in helping to grease the skids for the industry’s performance.   It’s common knowledge that both new and used vehicle prices have risen substantially over the past five years, but historically low auto finance rates have kept monthly payments essentially flat. For example, per Experian Automotive data (which I’ ...

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