Fuel Economy and Supply-Demand Trends Help Strengthen Residual Values


Eric Lyman
VP, Edi­to­r­i­al and Part­ner Devel­op­ment

Resid­ual val­ues are see­ing a strong fore­cast from ALG – an increase of 0.5 per­cent­age points (ppts) on aver­age in the 36-month term. Seg­ments with stronger fuel econ­o­my are mar­gin­al­ly more pos­i­tive. Demand is rais­ing resid­u­als across seg­ments while indus­try-lev­el sup­ply is very neg­a­tive; seg­ment lev­el sup­ply is most­ly neg­a­tive, though a few seg­ments see increas­es.

Here’s the lat­est ALG Indus­try Report – March/April Edi­tion

Com­pact MPV, Com­pact and Pre­mi­um Per­for­mance Had Strongest Gains:
Com­pact SUV up 0.8-ppts, Com­pact up 0.9-ppts, and Pre­mi­um Per­for­mance increased 1.2-ppts since last edi­tion.

Pre­mi­um Mid­size Util­i­ty, Prem. Com­pact Util­i­ty, and Prem. Com­pact Below Indus­try Aver­age of 0.5-ppts:
Prem. Mid­size Util­i­ty at -0.2-ppts, and Prem. Com­pact Util­i­ty and Prem. Com­pact both at 0.2-ppts.

Used Sup­ply Fore­cast Rose Sig­nif­i­cant­ly Caus­ing –0.5-ppt Impact on Resid­u­als:
Seg­ment sup­ply changes vary from –0.5-ppts for Pre­mi­um Mid­size Util­i­ty to 0.4-ppts for Pre­mi­um Per­for­mance.



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