CNW Forecasts Residuals

BANDON, Ore. — One of the topics tackled in CNW Research's most recent analysis of the marketplace was residuals. And interesting enough, the company found that two domestics appear to be gaining ground.

"Ford, after years of seeing its index decline, has had a slow but progressive improvement over the past few months, reflecting better product offerings, higher consumer interest in its vehicles and a slight, but significant cutback on program fleet sales," explained Art Spinella, of CNW Research.

Basically, to come up with the data, CNW looked at the difference between current residual value projections and probable future used values.

"In November, future used values were projected at only 81 percent of published industry residual value forecasts," Spinella pointed out.

Traditionally strong, both Honda and Toyota were in the 80th percentile, at 88.9 percent and 81.2 percent, respectively. Also making a strong showing was General Motors, which came in at the 85.5 percent.

"Toyota, which has historically been above the industry average, has been statistically dead even for the past two months," Spinella said.

Meanwhile, "Honda, reflecting virtually no major fleet sales, continues to be the star performer among the Big 6 automakers, while GM, after its bold re-pricing strategy two years ago has succeeded in beating the industry average for all of this year."

Going on, he noted that some models within the top showing brands are "true gremlins."

"Corolla, for example, is now approaching 20-percent big-fleet penetration, including daily rentals, and future used values are well below current residual projections," Spinella indicated.

"In GM's case, the solid numbers are due to continued strong demand in the used market for its trucks and SUVs," he continued. "Its cars fair poorly."

Incentive levels also have an impact.

"Toyota's zero-percent APR for 60 months on the Tundra translates into more than $6,300 of incentive bucks, and dealer discounts on Sonata suck nearly $3,000 out of Hyundai's future used values' total index," Spinella explained.

"In all cases, however, the brand takes the hit in terms of public perceptions even if the culprit is a single model," he highlighted.

Breaking down the results by brand for 2007, CNW found future used value percentages of current residual projections:

GM

Jan.: 88

Feb. 87.3

March: 86.9

April: 85.5

May: 85.3

June: 85.2

July: 85

Aug.: 84.2

Sept.: 83.9

Oct.: 85.7

Nov. 85.5

 

Ford

Jan. 75.2

Feb. 74.1

March: 71.7

April: 70.3

May: 70.3

June: 70.8

July: 71.6

Aug.: 72.7

Sept.: 72.9

Oct.: 73.1

Nov.: 74.1

 

Chrysler

Jan. 70.6

Feb.: 68.8

March: 63.4

April: 61.3

May: 60.7

June: 60.8

July: 60.2

Aug.: 60.3

Sept.: 60.6

Oct.: 60.5

Nov.: 60.7

 

Industry

Jan.: 83.2

Feb.: 83.1

March: 80.4

April: 79.8

May: 79.6

June: 79.6

July: 79.5

Aug.: 79.3

Sept.: 79.2

Oct.: 81.2

Nov.: 81.2

 

Toyota

Jan.: 88.1

Feb.: 87.5

March: 86.4

April: 84.8

May: 84.3

June: 84.2

July: 82.5

Aug.: 81.6

Sept.: 81.4

Oct.: 81.2

Nov.: 81.2

 

Honda

Jan.: 88.5

Feb.: 89

March: 88.9

April: 89

May: 88.9

June: 88.9

July: 88.8

Aug.: 88.8

Sept.: 88.9

Oct.: 88.8

Nov.: 88.9

 

Nissan

Jan.: 80.4

Feb.: 80.2

March: 81.3

April: 79.2

May: 78.8

June: 79.6

July: 79.9

Aug.: 79.5

Sept.: 79.6

Oct.: 79.7

Nov.: 79.9

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