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 138,600 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

                              May 14, 2024 - Growth in Wholesale Auction Sales
                              • Sales of late-model vehicles grew 15% in wholesale auction sales volume during April 2024 year over year, according to AuctionNet data from the National Auto Auction Association in Auto Remarketing. The 1-3-year-old vehicle category also grew 3% month to month in wholesale action volume. Other categories showing growth were vehicles 11 years and over (17% year over year) and 4-6 years old (11% year over year). There were 577,200 wholesale auction sales in April 2024, which is 14.7% higher year over year and slightly lower than March 2024. Year-to-date, wholesale auction sales were up 9% year over year and marked the strongest January-April total in five years.
                              • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                              • 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 April 2024 after a brief expansion in March, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 49.2% in April, down 1.1 percentage points from the 50.3% recorded in March. A reading above 50% indicates manufacturing expansion. Prior to March’s expansion, US manufacturing activity had fallen below the baseline for growth for 16 consecutive months. April’s New Orders Index was in the contraction zone at 49.1%. The April Production Index was 51.3%, a decrease from March’s 54.6%. Nine manufacturing industries tracked by the ISM reported growth in April: Nonmetallic Mineral Products; Printing & Related Support Activities; Primary Metals; Textile Mills; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Transportation Equipment; Chemical Products; and Plastics & Rubber Products. The industries reporting contraction in April were Miscellaneous Manufacturing; Machinery; Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Paper Products.
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