Welcome to 2014! This is the first of twelve editions of the monthly Beggs on the Specialty Market video blogs covering the markets for Recreational Vehicles, Motorcycles and Powersports, the Exotic and Collectible vehicles and the Medium and Heavy Duty Trucks and Commercial Trailers. The Black Book Editors are in the field gathering market information and providing the most current and accurate values for these segments of the industry.

We just came through the slower months of the wholesale activity and are ready to see increased interest in both the wholesale channels and the retail facilities for each of these markets, except for the snowmobiles of the powersports industry.

Continuing improvements in economic conditions, funding strength and manufacturing growth all indicate improving markets. The one side that is good for lenders but limits some of the once present inventory is the continuing lower volume of repossessions. This is especially the scenario within the RVs and the powersports. For now let’s take a closer look at each of the specialty markets.

Medium and Heavy Duty Trucks and Commercial Trailers:

Let’s begin with a steadily improving market, the work horse products of the industry, the Medium and Heavy Duty Trucks and Commercial Trailers.

Looking back at the month of December we see for the first time since the month of August that the level of price changes increased month over month for the medium duty trucks. This was the case within the newer model 2011s and the 2012s as well as the group of slightly older trucks, the 2003 to 2010 models. On the later model units the decline was an almost two year high level monthly change of -$902 in August declining each month through December to -$282 and then increasing for the January 1st monthly change of -$434.

According to Black Book, the group of medium duty trucks for model years 2003 to 2010 had the same pattern, just at lower dollar levels. From the -$353 change for August 2013 declining each month to December of -$115 which then increased to -$242 for the January 1st change. The -1.3% most recent monthly change matches the average monthly percentage of the past six months.

The price of fuel is a major expense within the trucking industry. Fortunately the price at the pump has been more stable throughout most of 2013 and since the middle of August has been below the previous year price. And the past two weeks have seen diesel prices decline after seeing increases the prior two weeks. Will this more stable pricing continue throughout 2014?

There is some other good news for the trucking industry, through November orders for new Medium Duty trucks are up 26% over a year ago and, up 11% year to date. Over the same time period Heavy Duty trucks are up 6% over a year ago and up 13% year to date. This is another trend we would like to see continue as this will increase the amount of inventory available for resale at auctions around the country. We must watch the age of the trade-ins during this increase in new truck orders and resulting sales to see the effects on the used market values.

Heavy Duty Trucks and Commercial Trailers for sale at the limited number of heavy duty auctions this past month was respectable for the holiday auction schedule. Values went down more than the previous month, however even the largest decrease in value was within the range for possible heavy duty equipment depreciation. The late model (2011-2012) Construction/Vocational units continue to depreciate the least, at an average of- $1063.00 (-1.5%). Over the Road trucks came in at -$1510.0 (-2.1%), whereas Regional Tractors went down on average - $1585.00 (-2.5%).  These numbers are the highest monthly changes since the May 2013 market adjustments but lower than year ago levels, for these late model pretty expensive trucks.

2003-2010 year models came in at -$409.00 (-1.2%) for Construction/Vocational units, -$541.00 (-1.7%) for Over the Road trucks and -$551.00 (-2.2%) for regional Tractors. Like the later model units the four to ten year old trucks show similar change level patterns over the same periods of time. There seems to be increased activity on the retail side with dealers reporting higher sale figures month over month. We are looking forward to a good spring market being driven by reports of new heavy duty truck orders, and ultimately, additional trade-ins for the wholesale market. This creates more opportunities within the wholesale and retail markets.

Recreational Vehicles:

The annual RVIA Convention and Exposition was held a few weeks ago in Louisville, Kentucky. I’m pleased to report that the industry is alive and well, and that 2013 was a great year for RV dealers and manufacturers alike. There was a lot of great new product on display, and 2014 looks like it will be even better as the economy continues to improve.

All RV market segments improved a little this month. Motor homes came in at an average selling price at auction of $34,306, which is actually up $767 (2.2%) from last month’s $33,539. This reverses a two month trend of values dropping roughly $3,000 per month. Towables, including travel trailers, fifth wheels, and camping trailers, increased to $9,665, up $148 (1.5%) from last month’s $9,517. For reference, one year ago the average motor home sold for $39,778 at auction, while the average towable was $10,428.

Black Book’s RV values closely tracked the market once again this month. The surprisingly good sales month caused actual sales of motor homes to come in at 105% of book value, while towables managed an impressive 102%.

Motorcycles and Powersports:

Now that 2013 is behind us, many powersports dealers are starting to stock up on inventory in anticipation of warmer weather and increased sales this spring. Activity and pricing at the auctions have mostly reflected this, but not all locations around the country are seeing the same results. What we are seeing is a general decrease in no-sales and “if” bids, coupled with a greater willingness on the part of buyers to pay market value for inventory. 

While the overall market appears to be making the turn from decreasing winter prices, to appreciating spring/summer pricing, it has not gotten there quite yet, and your local market may or may not be seeing the same results.

Much like last month, overall prices are still decreasing, but by very small amounts. Street bikes, scooters and dual sports are down by .5%, while ATVs and Cruisers are down .6%, and off road bikes are down .7%. In dollar terms none of these changes are dramatic, ranging from a low of -$9 for scooters, to a high of -$50 for the cruisers.

The utility vehicles have basically held their pricing from last month, with only minor changes in price showing an average decrease of -$6 per unit, or a drop of -.1%.  

Snowmobiles are up once again, but by relatively small amounts, averaging 1.7 percent across the segment, or $77 a unit. This is the third year in a row that snowmobile pricing has been on the positive side but sluggish for the seasonality.

Up to the time this is being recorded, there has not been a huge amount of snow this winter, which can drive prices on these units upwards at a dramatic rate. Absent a major winter storm or two, it appears we are in for another weak season for these units.

Collectible and Exotic Vehicles:

As we turn the calendar to 2014 we are just around the corner from the group of collector auctions that are on most collectors’ minds, the upcoming collectible car auctions out in sunny Scottsdale, Arizona in a couple of weeks. As you know, there are several major auctions taking place this year, including Barrett-Jackson, Russo and Steele, RM, Bonhams, Silver, and Gooding. I don’t think it is going too far out on a limb to predict that the sales will be HUGE, both in terms of total dollars spent and record prices paid for individual cars. Many of you are probably heading out there, either to actually buy or sell a collectible car, or maybe just to take in the spectacle first-hand. If you do, be sure and look for Eric Lawrence, our collectible vehicle editor. Eric will be out there pretty much all week rotating among the auctions. If you’re not making the trip this year, you can watch several of the auctions online or even a few on your own big screen TV.

Probably the hottest car segments right now are the Vintage Exotics, the post WWII through very early 1970s Ferraris, Lamborghinis, Astons, Maseratis, Rolls, Bentley, and certain higher end Jags, BMWs, Porsches, and Mercedes. Big postwar American classics are also back in favor, as are the top muscle cars, which we also have some surprising numbers on the early to mid-1970s intermediate and full size cars made in the USA. Interest in older pickups and SUV is also pretty strong.