Black Book: Weekly Market Report

Black Book Market Insights

Wholesale Prices, Week Ending June 17th

Wholesale values continued to decline last week, with all but one segment (Small Pickups) declining. In comparison to pre-pandemic, the declines are only slightly higher than what is typical for this time of year.

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

Car segments                         -0.41%              -0.45%                -0.35%

Truck & SUV segments        -0.37%              -0.34%                -0.22%

Market                                   -0.38%              -0.37%                -0.27%

Car Segments

• On a volume-weighted basis, the overall Car segment decreased -0.41%. For reference, the previous week, cars decreased by -0.45%.
• All nine Car segments increased last week.
• Sub-Compact Car reported the largest drop last week, down -0.75%. The prior week, the segment also had the largest decline for cars, with a decrease of -0.89%.
• Sporty Car went negative last week by -0.18%, compared with the minimal gain the prior week of +0.04%.

Truck / SUV Segments

•  The volume-weighted, overall Truck segment decreased -0.37%, staying consistent with the prior week’s decrease of -0.34%.
•  Twelve of the thirteen Truck segments reported a decrease last week.
•  Small Pickup was the only segment to report an increase last week, up +0.11% after the prior four weeks of declines that averaged a weekly decrease of -0.27%.
•  Compact Van reported the largest decline at -1.36%. The segment is small, so it does not take much to report a large percentage change.

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.

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 Q4 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 1.01 points, up from the slight dips we saw at the beginning of the year and above the 1.00 mark for the first time this year.

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

Wholesale

There are still a lot of IF’s and NO sales at most of the auctions across the country, which is reflected in the lower conversion rates we have seen in the last two weeks. Prices in nearly all of the segments are dropping but the adjustments are not dramatically different from what is typical for this time of year (pre-pandemic). Auction inventory appears to be increasing at some auctions, this may be due to the increase of repossessions hitting the lanes.

As always, the Black Book team of Analyst will keep their eyes on the market watching for developing trends and insights.

The Estimated Average Weekly Sales Rate decreased to 47% last week.