Weekly Market Report: Black Book

Black Book Market Insights

Wholesale Prices, Week Ending April 1st

The market had another week of larger than typical gains, increasing another +0.51%. Out of the twenty-two segments that we report on each week, nineteen had gains last week. Compact and Full-Size Vans and Prestige Luxury Cars continue to decline, but the rate of decline is lessening each week.

                                            This Week           Last Week          2017-2019 Average (Same Week)

Car segments                         +0.62%               +0.61%                +0.21%

Truck & SUV segments        +0.46%               +0.46%                -0.06%

Market                                  +0.51%              +0.51%               +0.06%

Car Segments

• On a volume-weighted basis, the overall Car segment increased +0.62%. For reference, the previous week, cars increased by +0.61%.
• Eight of the nine Car segments increased last week.
• Compact Car had the largest gain last week at +0.90%, consistent with the prior week’s increase of +0.88%.
• Prestige Luxury Car reported the forty-third consecutive week of declines, but the rate of decline was very minimal at only -0.03%. This is the lowest decline for the segment since June 2022.

Truck / SUV Segments

• The volume-weighted, overall Truck segment increased +0.46%, compared with the prior week’s increase of +0.46%.
• Eleven of the thirteen Truck segments reported increases last week.
• The Minivan segment had another week with a large gain, up +1.31%, after the prior week’s increase of +1.66%.
• Compact (-0.24%) and Full-Size (-0.10%) Van continued to decline, but the rate of depreciation is slowing down.

Weekly Wholesale Index

The graph below looks at trends in wholesale prices of 2-6-year-old vehicles, indexed to the first week of the year. The index is computed keeping the average age of the mix constant to identify market movements.

Calendar year 2020 and 2021 ended with used wholesale prices at elevated levels. With economic patterns (including the automotive market) driven by the pandemic, normal seasonal patterns (e.g., 2019 calendar year) in the wholesale market were not observed for most of the last three years. We saw a similar picture in 2009, at the end of the Great Recession. Calendar year 2021 did not have typical seasonality patterns as the market had rapid increases in wholesale values for most of the year. The Wholesale Weekly Price Index reached the highest point of the year at the end of December 2021, reporting over 1.51 points. In 2022, the price index was on a mild rollercoaster until July, after which point, prices were on a continuous decline until the end of the year.

Retail (Used and New) Insights

• Ram is getting dealers ready for a possible mid-size EV pickup to enter the lineup in the near future. The company showed dealers, at a meeting in Las Vegas, its ideas for a mid-size EV pickup concept.
• EV newcomers, Rivian and Lucid, are likely to report disappointing first-quarter deliveries as Rivian grapples with manufacturing issues and Lucid tackles waning demand.
• Honda is recalling more than 330,000 vehicles for detaching side view mirrors.
• Hyundai and Kia are recalling more than half a million vehicles due to a fire risk associated with the tow hitch harness and urging owners to park their vehicles outside.

Used Retail Prices

Used Retail Prices are more accessible than in years past, due to the proliferation of ‘no-haggle pricing’ for used-vehicle retailing. Transparent pricing upfront makes the car buying process more enjoyable for customers and allows Black Book to accurately measure retail market trends.

At the on-set of the pandemic, in CY2020, used retail prices increased slightly, following typical seasonal patterns, and then began dropping in April, finally hitting a low point in the late spring months. By late summer of CY2020, Used Retail Prices increased as supply of new vehicle inventory started to become scarce, but retail demand slowed down at the end of CY2020, resulting in declining retail asking prices for the last several weeks of the year. When CY2021 kicked off, demand rebounded while retail prices lagged slightly behind wholesale prices; March of 2021 started the dramatic increases in Used Retail Prices, fueled by stimulus payments, tax season, and shortages of new inventory. During the third quarter, retail prices continued to rise at a slower rate but soon picked up the pace once again to start the fourth quarter. In Q4, prices on retail listings steadily increased week after week. As CY2021 came to an end, the retail listing price index closed 36% above where the year began. The index then remained relatively stagnant through most of CY2022. In the fourth quarter of 2022, the Retail Listings Price Index declines started, but were not as steep as the wholesale price index.

This analysis is based on approximately two million vehicles listed for sale on U.S. dealer lots. The graph below looks at 2-6-year-old vehicles. The Index is computed keeping the average age of the mix constant to identify market movements.

Inventory

Used Retail

The used retail active listing volume index reverted back to one at the start of 2023. Currently, the index sits at 0.95 points.

The Used Retail Days-to-Turn estimate is currently around 52 days.

Wholesale

This week, we saw auction conversion rates drop slightly for the first time in seven weeks. Our Analysts have been noticing more no-sales as sellers are still holding tight on floors, but wholesale prices are still continuing to move upward. It appears that some sellers are willing to hold their vehicles longer in order to get a higher sale price.

The Estimated Average Weekly Sales Rate dropped slightly to 52% last week.