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Manheim announces sophisticated ‘Market Intelligence’ capability – introducing new Used Vehicle Value Index

Announcement posted by Manheim 05 Mar 2019

Manheim Australia, a leading automotive auction house recently unveiled a sophisticated new Market Intelligence software platform, which leverages the power of Cox Automotive’s rich database of over 10 million transactions per annum, data science and valuations expertise to help its automotive customers make effective product and pricing decisions in the Australian market.

 

Announcing the Manheim Used Vehicle Value Index

 

As part of the Manheim Market Intelligence project, the team has worked to create a Manheim Used Vehicle Value Index for the Australian market, which shows trends in wholesale prices going back to 2006.

 

Working with Manheim’s global Chief Economist’s team they have established an Australian equivalent of the well-known US Index – a long trusted gauge of upswings and downturns in used vehicle prices that is commonly referenced in the Wall Street Journal among other mainstream publications.

 

The Manheim Used Vehicle Value Index (MUVVI) is updated monthly using sales data from Manheim, which captures data from their extensive wholesale used-vehicle marketplace and auction network. By applying statistical analysis to its database of millions of used vehicle transactions, Manheim has developed a reliable measurement of used-vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold.

 

The MUVVI will help Manheim to have richer discussions with customers and prospects about the state of the used car market and where prices might be headed in the future. For instance, if a customer wanted to understand the impact of an economic shock on used car prices, Manheim can analyse what happened to prices during similar events in the past. The index also gives them the ability to manage buyer and seller expectations by highlighting the apparent seasonality in used vehicle values, historical past performance and trend lines. It is also helpful when it comes to assisting customers with setting residual values.

 

Product Manager for Data and Market Intelligence, Brenton Barnes commented, “Our new Index has a number of useful applications for the automotive industry. It has been useful for validating the opinions buyers and sellers have about the used car market and in some cases addressing misconceptions. For example, from time to time we hear comments like “used car prices increase during a recession”. The theory goes that in a recession, would-be new car buyers settle for a used car or demonstrator – pushing up prices. The reality is, during the global financial crisis all asset prices suffered. We found used vehicle prices fell 17% below their long run average.”

 

“The index has also been useful in highlighting trends in major vehicle segments. For instance, the index was useful in measuring spikes in sales prices for large vehicles at around the time of the Ford and Holden plant closures. As evident in Figure 1, when Ford ceased domestic manufacturing in October 2016 large car prices spiked to 19% above their long run average and when the Holden closed their South Australian plant in October 2017 prices rose to 20% above the long run average before normalising again.”

 

Manheim will commence publishing results of the Index each quarter.


The team has also been able to expose seasonality in used car prices. The team identified that vehicles sold in the first half of the year were more likely to achieve above-average prices. In particular, vehicles sold in April achieve above-annual average prices 92% of the time (12 out of 13 years) with the only exception being the period effected by the global financial crisis.


For more information or to request a demonstration, please visit mmi.manheim.com.au.

 

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For further information, please contact:

Mathew McAuley – Manheim Public Relations | Mobile: +61 419 333 696

Email: mathew.mcauley@manheim.com.au

 

About Manheim Market Intelligence Team

 

Manheim’s Market Intelligence team has a mature data science capability, which it has leveraged to develop a new digital portal customers can use to track the performance of the wholesale market and view wholesale price predictions for the most popular new models. The team also provides custom valuations, consulting and advice on matters relating to the used car market.

 

The team also worked with Manheim's global Chief Economist's team to establish an Australian equivalent of the US Used Vehicle Value Index - a trusted gauge of upswings and downturns in used vehicle prices commonly referenced in the Wall Street Journal and CNBC in the US.