Black Book Market Insights

Wholesale Prices, Week Ending March 18th

The market continued to experience growth last week, with gains far exceeding what is typically seen this time of year. Pre-COVID, this was the time of year when some segments began to move into positive territory, but this year we have already seen six weeks of most of the segments reporting increases.

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

Car segments                      +0.63%              +0.46%                  +0.20%

Truck & SUV segments     +0.43%              +0.43%                  -0.17%

Market                                +0.49%              +0.44%                  -0.01%

Car Segments

• On a volume-weighted basis, the overall Car segment increased +0.63%. For reference, the previous week, cars increased by +0.46%.

• Seven of the nine Car segments increased last week.

• After the rate of increase for Sporty Cars slowed down two weeks ago, it picked up steam again last week, with a gain of +1.17%. The segment has increased for nine consecutive weeks now.

• Prestige Luxury Car continues to decline, but it had the lowest single week decline for the segment since July 2022.

Truck / SUV Segments

• The volume-weighted, overall Truck segment increased +0.43%, compared with the prior week’s increase of +0.43%.

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

• Compact Crossover had the largest increase last week, with a gain of +0.92%. This is the third consecutive week that the segment has had the largest increase of all Truck segments.

• Despite all of the increases, Compact and Full-Size Vans continue to decline.

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

• Audi is expanding their line-up of all-electric vehicles with the latest announcement of the Q6 e-tron. The new model is expected to debut later this year and is anticipated to come to the market as a 2025.

• Mercedes-Benz is redesigning the GLC for 2024 with a release to the US market later this year. The redesigned compact crossover will now be offered with an electrified powertrain.

• Ferrari is bringing back a front-engine soft top convertible for the first time since 1969. The Roma Spider does not have a US arrival date or price yet.

• Acura released the stats for the 2024 Integra Type S hatchback, and it will continue to edge out the Civic Type R with 5 additional horsepower for a total of 320-hp.

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

The used retail active listing volume index reverted back to one at the start of 2023. Currently, the index sits at 0.98 points.

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

Wholesale

Over the last six weeks we’ve seen an increase in auction conversion rates across the country and last week was no exception. Wholesale prices continue to increase in almost all segments. Full size trucks and SUVs are in high demand, and with General Motors announcing that their truck plants would be shut down for two weeks this month, this could drive used truck prices even higher. The team here at Black Book will continue to analyze data and watch for developing trends in the marketplace.

The Estimated Average Weekly Sales Rate increased to 53% last week.