Auto and Motor Vehicle Wholesalers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,600 auto and motor vehicle wholesalers in the US sell or arrange the purchase or sale of new and used passenger cars, trucks, trailers, and other motor vehicles to commercial dealers. They buy from dealerships and auctions and sell to other dealerships and through auctions. Firms may offer financing, reconditioning, transportation, storage, inspection, and other services.

Seasonal Demand Affects Pricing

Demand for used vehicles peaks during the summer months, with volume often twice as high as in the winter, according to the National Auto Auction Association.

Volatile Pricing, Economic Vulnerability

Used vehicle wholesale pricing can be volatile and decline during periods of economic weakness.

Industry size & Structure

The average auto and vehicle wholesale or auction company employs fewer than 10 workers and generates about $139 million annually.

    • The auto and vehicle wholesaling and auction industry includes about 4,600 companies that employ 132,600 workers and generate $640 billion annually.
    • The industry is concentrated; the top 50 companies account for almost 90% of industry revenue.
    • Large vehicle auction providers include Manheim (Cox), ADESA, and ACV. R. Hollenshead Auto Sales and Wholesale, Inc (RumbleOn) are the largest independent vehicle wholesalers.
    • Before the pandemic, auto auctions helped sell about 12 million cars annually.
    • Automobile wholesalers account for 54% of sales, while heavy truck, trailer and tractor wholesalers account for 8% and light truck and van wholesalers account for 18%.
                              Industry Forecast
                              Auto and Motor Vehicle Wholesalers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Jan 9, 2024 - Rising Demand for Hybrids
                              • Hybrid market share is expected to grow in 2024 as consumers continue to see hybrids as a comfortable choice in a transition away from internal combustion engine (ICE) vehicles, according to an analysis by Edmunds in its “2024 Predictions” report in Repairer Driven News. The hybrid market share reached nearly 10% in November 2023, an increase of 99% year-over-year compared to the previous year’s 4.9% share. Hybrid vehicles are outpacing EV demand, as EV market share grew by 25% during the same period. According to Ivan Drury, director of insights at Edmunds, “Sales are taking off for the humble hybrid. You’d be hard-pressed to find a hybrid—they’re almost all sold out. They’re vehicles for people who want to live their life with more benefit and less complexity.”
                              • US manufacturing activity contracted in December 2023, falling below the baseline for growth for the fourteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.4% in December, up from the 46.7% recorded in November. A reading above 50% indicates manufacturing expansion. December’s New Orders Index remained in the contraction zone at 47.1%. The December Production Index was 50.3%, up from November’s 48.5%. Only one manufacturing industry tracked by the ISM reported growth in December: Primary Metals. The industries reporting contraction in December were Printing & Related Support Activities; Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; Textile Mills; Petroleum & Coal Products; Paper Products; Wood Products; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Chemical Products.
                              • Continued strong demand and improving inventory levels are expected to support growth in the auto and motor vehicle wholesalers industry, which is projected to grow at an over 5% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is faster than the projected growth of the overall economy. The forecast follows several years of disruption during the pandemic, with a sales drop of 8.9% in 2020, an increase of 11.2% in 2021, and an increase of 10.3% in 2022.
                              • The United Auto Workers (UAW) union reached tentative agreements with General Motors, Ford, and Stellantis, according to Repairer Driven News. The deals, which were ratified by union members, ended a “stand-up” strike method targeting specific plants that began in mid-September. Workers returned to work during the ratification process. The agreements are expected to improve wages and job security protections for union workers. The union represents nearly 150,000 autoworkers, and 46,000 employees went on strike at the peak of the strike.
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