As the saying goes: Waste not, want not, meanwhile, today's new-vehicle market will generate (ultimately) the used-vehicle market of tomorrow. If there is a decrease in new-vehicle sales, there will be a corresponding decrease in the future number of used vehicles in the marketplace.

Even though there is a lot of nervousness in the market, no one is anticipating a dramatic decrease in new-cars and trucks commercial fleet orders for the 2009 model-year. However, the same cannot be said for the retail new-vehicle market. The projection is for the 2008 model-year to close out with an anemic 14.7 million new-vehicle sales, perhaps lower. This compares to16.1 million new-vehicle sales in 2007, 16.5 in 2006, and 17 million in 2005.

New-vehicle sales seem to be moving from weak to weaker. "New-vehicle sales in June represented a seasonally adjusted annual selling rate of just 13.6 million units. That is the slowest pace since August 1993," said Tom Kontos, executive VP customer strategies & analytics for ADESA. Kontos blames the drop in new-vehicle sales on macroeconomic conditions – tighter credit, higher fuel prices, and a weaker labor market.

In a July 14 press conference, GM said it is prepared for total U.S. new-vehicle sales to be as low as 14 million for the next two years. One thing is certain, in the near-term, there will be much fewer trucks built than in the immediate past(of course, I think the built for dumper,Tipper,trailer,tractor, and tank
will be a corresponding reduce). GM Chief Operating Officer Fritz Henderson said the automaker intends to reduce truck production capacity by 300,000 units. Likewise, all other OEMs are also reducing their truck production.

Manufacturing Used Vehicles

The Wholesaleused-vehicle market has been a real challenge for fleet managers since the first of the year. However, if you accept the truism that new-vehicle retail sales "manufactures" the used vehicles of tomorrow, then we should anticipate a smaller inventory of used vehicles in the Wholesale market in the future.

"If we're not building as many new vehicles, where will the future used-vehicle supply come from?" said Darrin Aiken, assistant vice president, remarketing for Wheels Inc. "If we have weak new-vehicle markets in 2009 and 2010, there is a distinct possibility there may be a shortage of used cars and trucks three years afterwards. When there is a shortage of inventory, experience tells us that resale prices will increase."

Others agree with this assessment. "With the recent announcements by Ford and GM, some cars and trucks segments are dropping drastically for 2008, 2009, and beyond. Will this lower supply of future used vehicles be the catalyst for higher used values two to four years down the road? Quite possibly," said Ricky Beggs, VP and managing editor of Black Book.
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