General Motors Co.’s and Ford Motor Co.’s finance arms likely face multibillion-dollar losses linked to the dramatic drop in used vehicle prices, JPMorgan Chase & Co. analysts said.
Manheim, North America’s largest auto-auction company, for the first time released a mid-month view of its closely watched used-vehicle value index last week, citing the level of “turbulence” in the auto market. Wholesale prices plunged 11.8% in the first 15 days of April, a decline that will easily set a record if it holds for the full month.
The index reading suggests prices are falling faster and steeper than JPMorgan was expecting, lead analyst Ryan Brinkman wrote in a report April 20. Earlier this month, he predicted a 15% drop within months.
“The real losers of the development are likely the …