Manheim Australia, a key player in the automotive auction sector, has reported a significant increase in its vehicle sales volume for the third quarter (Q3) of 2024. The wholesale auction house, which manages vehicle sales for Fleet Management Organisations (FMOs) and automotive manufacturers, has seen its total volume rise by nearly 40% year-over-year (YoY), returning to pre-COVID activity levels. This article delves into Manheim’s Q3 performance, market trends, and the implications for fleet managers and vendors.
Record-Breaking Sales Growth
The Q3 2024 sales volume at Manheim rose by 39.4% compared to the same period in 2023. Year-to-date (YTD), Manheim’s overall volume is up 40%, demonstrating consistent growth throughout 2024. Notably, Q3 volumes were also 7.3% higher than Q2, indicating sustained momentum in vehicle auctions as the year progresses.
The Fleet & Lease sector has been a standout performer. Vehicles remarketed by FMOs, such as LeasePlan, Custom Fleet, Summit, and SG Fleet, set a new record for quarterly sales volume at Manheim in Q3, breaking a 22-year-old record. In the first nine months of 2024, Fleet & Lease sales were up 43% YoY, marking the highest cumulative total for this period in Manheim Australia’s history.
Broad-Based Volume Increases Across Sectors
Manheim’s growth has not been limited to Fleet & Lease. Sales volumes have surged across various vendor types:
- Dealers: 44% YoY increase
- Government: 47% YoY increase
- Manufacturers: 72% YoY increase
- Rental Companies: 53% YoY increase
This broad-based growth highlights a robust recovery in the wholesale market, driven by an improving supply of used vehicles across Australia.
Regional Sales Growth
Manheim’s growth trajectory extends across all regions in which it operates. Some of the most notable regional YoY sales increases include:
- Brisbane: 48%
- Darwin: 75%
- Perth: 46%
- Townsville: 44%
Smaller increases were seen in areas like Hobart (11%) and Newcastle (26%), while Sydney and Melbourne posted growth of 28% and 42%, respectively.
Declining Wholesale Prices
While sales volumes are up, wholesale vehicle prices continue to soften from the inflated levels seen during the COVID-19 pandemic, which were driven by vehicle shortages. Manheim’s Wholesale Price Index, which tracks price trends, was at 131.7 in September 2024, reflecting a 31.7% increase since December 2019. However, the index is down 4.6% YoY and has dropped by 21.2% from its peak of 167.6 points in May 2022.
Passenger vehicles (sedans, hatchbacks, and wagons) have been the most affected, with a 9.2% YoY decline in the price index to 147.6, due to a decrease in supply and lower market demand. SUVs and utes experienced smaller declines of 0.6% and 7%, respectively.
Vehicle Age and Price Trends
The age of vehicles also influences pricing trends. Older vehicles continue to show higher inflation rates on the price index compared to newer ones, driven by strong demand from private buyers for vehicles aged 8-10 years. Conversely, newer models are experiencing price pressure due to discounts in the new vehicle market.
Manheim’s Wholesale Price Index by vehicle age in September 2024 was:
- 2-4 years: 115.8 (down 9.1% YoY)
- 5-7 years: 134.7 (down 3.5% YoY)
- 8-10 years: 139 (down 7.5% YoY)
Residual values for 2-4-year-old vehicles, a key metric for fleet managers assessing total cost of ownership, have fallen to 65.8%, compared to 68.5% in September 2023 and 82.3% during the market peak in May 2022.
Top-Selling Vehicles
Manheim’s top-selling models for 2024 include:
- Ford Ranger: Up 34.5% YoY
- Isuzu D-Max: Up 70.2% YoY
- Toyota HiLux: Up 49.6% YoY
- Toyota Corolla: Up 74.5% YoY
- Toyota Camry: Up 55.9% YoY
The Toyota RAV4, particularly the 2-4-year-old variants, saw the highest percentage growth YoY, with an eight-fold increase in volume. This surge in availability has driven prices lower, following the inflated levels seen in 2022 and 2023.
Implications for Fleet Managers and Vendors
The latest data from Manheim Australia is crucial for fleet managers and vendors navigating the evolving automotive landscape. The consistent rise in sales volume indicates a broader market recovery, but the declining prices suggest a continued adjustment from the extraordinary conditions during the pandemic.
Fleet managers should consider the implications of these trends for total cost of ownership calculations, especially regarding residual values for vehicles aged 2-4 years. Vendors, meanwhile, should be prepared for softer prices, particularly for passenger vehicles, as the market seeks equilibrium.
