Black Book Market Insights

Wholesale Prices, Week Ending April 8

The market continued to increase last week, but the rate of gain slowed slightly to +0.43%, compared with the prior week’s increase of +0.51%. Despite the market reporting the smallest single week increase in a month, the gains remained far larger than typically experienced this time of year.

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

Car segments                    +0.52%         +0.62%             +0.18%

Truck & SUV segments   +0.39%         +0.46%              +0.03%

Market                               +0.43%        +0.51%             +0.09%

Car Segments

On a volume-weighted basis, the overall car segment increased +0.52%. For reference, the previous week, cars increased by +0.62%.

• Eight of the nine car segments increased last week.

• Prestige Luxury Car minimally increased, with a gain of +0.0026%, the first time the segment has had an increase in value since last June.

• The Sporty Car segment has now been in positive territory for 12 consecutive weeks, with an average weekly increase of +0.60%.

Truck / SUV Segments

The volume-weighted, overall truck segment increased +0.39%, compared with the prior week’s increase of +0.46%.

• Twelve of the 13 truck segments reported increases last week.

• Compact Van returned to positive territory for the first time since September, with a minimal gain of +0.05%.

• Minivan (+1.12%) was the only segment to report a gain greater than 1%.

Weekly Wholesale Index

The graphic below looks at trends in wholesale prices of 2- to 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 years 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., the 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

The 2023 Toyota Corolla Cross Hybrid is set to hit dealer lots in June, and with it will come an entry-level pricing under $30,000, the cheapest crossover for the manufacturer.

Mini is giving us our first glimpse at the redesigned 2025 Countryman, which will be available in a both gasoline and electric variants. However, it is not yet known if both fuel types will make it to North America.

Toyota is ramping up its electric offerings, the latest being plans for a three-row all-electric sports utility vehicles that will begin production in 2025. This will be part of its plan to introduce 10 electric models globally by 2026.

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 onset 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 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 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, when prices on retail listings steadily increased week after week. As CY2021 ended, 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 graphic below looks at 2- to 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 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 55 days.

Wholesale

This week, we saw auction conversion rates drop slightly for the second straight week. Could "spring break’’ be a factor? We did notice fewer online buyers this week compared to past weeks. With that said, full-size trucks continue to perform well, as prices move upward for the seventh week in a row. More 2023 vehicles are rolling through the lanes now and getting a lot of attention, some still selling at or over original MSRP. The wholesale market has slowed a little the two past weeks, but don’t be surprised when it bounces back.

The Estimated Average Weekly Sales Rate dropped slightly to 51% last week.