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Welcome to the December edition of Beggs on the Specialty Markets, with data and analysis from Ricky Beggs of Black Book. The Black Book editors that focus their efforts to track and report the specialty markets have seen less activity but more necessary adjustments over the past month in these segments of the industry. This is not surprising as seasonality plays a large role in the activity levels, both retail and wholesale, within the RVs, powersports and collectible vehicles while slightly less within the commercial truck market. Let’s take a more specific look at each specialty market.
Speaking of seasonality, during the past few weeks each morning is beginning to feel a little more like winter than the one before it. It is definitely not “RV” weather in most parts of the country, and the auction prices certainly are beginning to reflect this.
Motor homes came in at an average selling price at auction of $33,539, which is just under $3,000 (-8%) less than last month’s $36,522. This is the second month in a row that the decline has been right around $3,000. Towables, including travel trailers, fifth wheels, and camping trailers, dropped to $9,517, a decline of $477 (-5%) from last month’s $9,994. For reference, one year ago the average motor home sold for $40,107 at auction, and the average towable was $9,836.
Black Book’s RV values closely tracked the market once again this month. Actual sales of motor homes came in at 102% of book values, while towables managed an impressive 98%.
Our RV editor, Eric Lawrence, will be attending the annual RVIA convention in Louisville, KY the first week in December. He’ll be walking around looking at the new products and talking to the manufactures. If you happen to run into him, be sure and say hello.
Collectible and Exotic Vehicles:
Most enthusiasts are still buzzing about some of the late summer and early fall collectible car auctions. On one hand we saw stunning Italian sports cars sell for tens of millions of dollars, and on the other, we saw buyers fighting over old Chevys that had been sitting unattended in a farmer’s field for forty years. That’s the beauty of this hobby…there is something for everyone!
It seems like everybody is getting ready for the big collectible car auctions in Arizona next month. Many people are getting their cars ready to sell, some are conferring with their financial planners and bankers, some are making airline and hotel reservations, and others are going to have friends over and watch the action live from the comfort of their living rooms.
We are expecting the various auctions to do very well. The extreme upper end of the market is very hot right now, and that should encourage the big spenders to open their wallets if they see something they like. They certainly did open the wallets wide at last week’s RM/Sotheby’s “Art of the Automobile” auction, which notched over $62,000,000 in just over two hours. Nothing gets a crowd pumped up like a multimillion dollar sale! This enthusiasm will almost certainly trickle down to both the mid-range and entry level collectibles as well. I don’t know if we’ll see the same numbers that we saw at the peak of the market, but we are predicting that records will be set in nearly all categories of vehicles.
Medium and Heavy Duty Trucks:
Just as we reported last month, the Medium Duty Truck market is continuing its strengthening trend. Along with the various wholesale adjustments that show a decrease in price, we have had some models that actually increased in value. We have also seen some models hold steady this month with no adjustment necessary.
Overall, 2010 thru 2003 Medium Duty units are down an average of $115, which is the smallest decline for this segment since August of 2012. Late model units are also relatively stable with an average decrease of $282. This is the smallest decrease in values for this segment since October of 2012.
In addition to the stable truck market, fuel prices have also been relatively stable. This can only be a good thing for the trucking industry’s bottom line. Across the country the national average for diesel is currently at $3.82 per gallon at the pump, which is the lowest it’s been since the first week in July. Gas prices, while up $0.03 this week over last week, are lower than they have been since February of 2011. The current national average for regular unleaded is $3.16 a gallon.
Within the Heavy Duty trucks and tractors for the better part of the month of November a stabilizing trend was apparent, although there were signs of an increased weakening trend for over the road aero trucks. For 2010 – 2003 model year trucks there was depreciation very close to that of October. Heavy Duty Over The Road Tractors showed the least amount of change, which was -0.6% (-$192.00) but if it wasn’t for the very strong values of the conventional long nose models being included in that segment it would have shown a good bit higher depreciation amount. Heavy Duty Construction and Regional Trucks were close to the same depreciation value at -0.7% which is -$218.00 and -$192.00 respectively.
If this trend continues, look for higher depreciation values next month for Heavy Duty Over The Road Tractors and Heavy Duty Regional Tractors as well, because both segments have a good bit of aero trucks included in their segment. This trend was pretty much the same for 2012-2011 models and will most likely be evident next month with even higher depreciation values than the 2010-2003 models.
Motorcycles and Powersports:
As we wrap up the specialty market reports, for those of you who have been following this monthly market summary for a while, it will not come as a shock to learn that most vehicles in the Powersports market are down once again this month, but we do have a couple of surprises in a few of the segments.
Recent months have seen fairly weak demand and correspondingly low prices at the auctions, but that appears to be coming to an end. This month the powersports market is starting to trend upwards ever so slightly. While most segments are still down, the drops are very modest. It appears as if prices have finally gone low enough to entice buyers into adding some inventory now, and to hold it through the winter months. For the dealers who have both the available funds, and the space to store the inventory until spring, this also has the benefit of providing some built in work for the service department over the winter months as they get the units front line ready for the spring.
For the segment by segment numbers, we will start off with the snowmobiles with winter officially arriving this month. The sleds are continuing to increase in price, but by an average of only $41, or a little less than one percent. They may show greater gains once we get the first real blast of snow in many areas of the country, but right now snowmobiles are not commanding premiums at auction.
On the other end of the seasonal vehicle spectrum, personal watercraft and jet boats are down as you would expect, dropping by 1.6%.
Most of the motorcycle, ATV, and utility vehicle segments are down slightly this month, dropping by between .6% and 1%, with two exceptions, dual sports and domestic V-Twins. The dual sports, as we have seen over much of the past year, continue to show above average pricing strength and are actually up by $17 dollars on average, or .3%.
The domestic V-Twins (read Harley-Davidson), while not up like the on/off-road bikes, are only down about half as much as the rest of the street bikes and metric cruisers.