Black Book Market Insights

Wholesale Prices, Week Ending February 18th

The market had another week of increases, gaining another 0.14% last week. Cars saw the largest increases with the 2-to-8-year-olds increasing 0.19% but the biggest jump came from the 0-to-2-year-old Cars, which gained 0.41%. That is the largest this segment of vehicles has had since November 2021.

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

Car segments                       +0.19%           +0.00%                   -0.38%

Truck & SUV segments      +0.11%           +0.04%                   -0.36%

Market                                 +0.14%           +0.03%                   -0.37%

Car Segments

• On a volume-weighted basis, the overall Car segment increased +0.19%. For reference, the previous week, cars increased by +0.00%.

• Six of the nine Car segments increased last week.

• Sporty Car and Full-Size Car reported the largest increases last week, of +0.57% and 0.52%, respectively. This was the fifth consecutive week of increases for the Sporty Car segment for an average weekly increase of +0.31%.

• Prestige Luxury Car reported the largest decline, -0.41%. This is the smallest decline for this segment since last July.

Truck / SUV Segments

• The volume-weighted, overall Truck segment increased +0.11%, compared with the prior week’s increase of +0.04%.

• Seven of the thirteen Truck segments reported increases last week.

• Sub-Compact Luxury reported the largest decline with a change of -0.37%, but Compact Van was not far behind with a decline of -0.36%.

• Compact Crossover had the largest increase for a second consecutive week, with a gain of +0.42%, compared with the prior week’s increase of +0.34%.

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

• Ford has paused production of the F-150 Lightning, their all-electric pickup, after one caught fire in their outdoor storage lot in Michigan. Ford is investigating the cause.

• The Buick Encore GX is receiving a redesign with styling ques from Buick’s electric vehicle concept that debuted last year, called Wildcat. The redesigned Buick GX is slated to begin production this Spring and go on sale later this year.

• VinFast received a one of the much-needed environmental permits to begin construction of their manufacturing facility in the United States. The facility will be in North Carolina and is necessary for VinFast vehicles to qualify for EV tax credits per the Inflation Reduction Act that was passed last year.

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 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

Used retail active listing volume index reverted back to one at the start of 2023. Currently, the index sits at 0.97 points.

The Used Retail Days-to-Turn estimate is around 50 days.

Wholesale

Now in week three of February, we continue to see the wholesale market improving. Prices on the 1500 series trucks are starting to increase, along with Full-Size SUVs, this week the 2022-2023 Full-Size SUVs were among some of the best-selling vehicles we saw crossing the auction block. Even with higher interest rates and fuel prices elevated, wholesale prices are on the rise. Additionally, auction inventory is showing some signs of improvement, having more vehicles available to purchase in the wholesale channel.

The Estimated Average Weekly Sales Rate was 49% last week.