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 5,000 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 about 26 workers and generates about $133 million annually.
- The auto and vehicle wholesaling and auction industry includes about 4,800 companies that employ 125,000 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
Recent Developments
Mar 13, 2023 - Used Vehicle Prices Climb in February
- Wholesale used vehicle prices on a mix, mileage, and seasonally adjusted basis increased by 4.3% in February from January, according to Cox Automotive data in Auto Dealer Today. It was the third consecutive monthly gain and the largest month-over-month increase since 2009. The Manheim Used Vehicle Value Index reached 234.5 in February, a decline of 7% from a year ago. Prices in 2022 were inflated due to pandemic-related supply constraints that caused decreased production. Prices for luxury cars seasonally adjusted had the largest drop year over year, down 10.1%, followed by SUVs (-8.6%) and sports cars (-7.4%). Pickup trucks (-3.9%) had the smallest decline year over year. On a month-over-month basis, all segments saw price increases between 3.3% and 5.9% in February. The non-adjusted price change in February was an increase of 3.7% from January and a drop of 5.6% year over year.
- Consumer confidence levels declined in February 2023 for the second consecutive month, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 102.9 in February 2023 from 106 in January 2023, as high prices and rising interest rates affected consumers’ willingness to spend. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Consumer confidence declined again in February. The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more.” Plans to purchase homes, vehicles, and appliances have cooled, in addition to a drop in vacation intentions, per Ozyildirim.
- CarMax has partnered with Israeli tech firm UVeye to provide drive-through vehicle inspections enhanced by artificial intelligence (AI) during its used-car auction process, according to Forbes. CarMax inspected 706,000 units in its wholesale business in the last fiscal year. UVeye’s inspection system uses AI, machine learning, sensor fusion, and cameras to find a range of issues including brake problems, fluid leaks, frame damage, underbody damage, and worn tires. CarMax, an investor in UVeye since 2021, will use the systems under a licensing agreement to provide condition reports to buyers at online vehicle auctions. CarMax moved its auctions online in 2020 partly due to the COVID-19 pandemic. According to CarMax VP Dave Unice, “We’ve been impressed with UVeye’s technology and we believe it will help us maximize efficiencies in our wholesale auction business.” Several dealers, including General Motors and Volvo, have announced plans to put UVeye inspection stations at their dealerships.
- Electric vehicle sales in the US jumped by two-thirds in 2022 even as the broader auto market decreased, according to the WSJ. Fully electric vehicles accounted for nearly 6% of all cars sold in the US in 2022, totaling more than 807,000, up from a 3.2% share the previous year, according to Motor Intelligence data reported by the WSJ. Meanwhile, total US auto sales dropped 8% in 2022 from a year earlier. Tesla continues to command the US electric vehicle market, but its share fell to 65% in 2022 from 72% in 2021 as competition continued to grow in the EV space. The Ford Motor Company placed second for EV sales, accounting for 7.6% of the US market for fully electric vehicles, followed by Hyundai Motor Co. and Kia Corp. combined for third place for 7.1% of the market. Offering consumers more models and price points are a priority for EV makers. According to JD Power data cited in the article, 53 EV models are on the market or will go on sale this year, compared to 625 separate vehicle models sold in the US in 2022.
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