Market Insights

Wholesale Prices, Week Ending May 13

The market continued the declines that started the week prior, this time down 0.15%; this is not far from what we would typically see for this time of year for seasonal declines. The pre-COVID market averaged a decline of 0.20% for this same week.

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

Car segments                            -0.15%               -0.06%                    -0.23%

Truck & SUV segments           -0.16%               -0.12%                    -0.18%

Market                                      -0.15%              -0.10%                     -0.20%

Car Segments

• On a volume-weighted basis, the overall car segment decreased 0.15%. For reference, the previous week, cars decreased by 0.16%.

• Only two of the nine car segments increased last week.

• Sporty car reported the largest increase, but the rate of increases is slowing; the segment increased 0.32%, the smallest single week gain in eight weeks.

• Subcompact car had the largest decline last week, at 0.41%. The last time the segment had a decline this large was in early February.

Truck / SUV Segments

• The volume-weighted, overall truck segment decreased 0.16%, compared with the prior week’s decrease of 0.12%.

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

• The pickup segments, small and full-size, continue to increase, but the rate of gains each week is slowing compared to what we’ve seen throughout most of this year.

• Full-size van (-0.59) had the largest decline for the segment since July 2022, when it decreased 0.55%.

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 in the wholesale market, e.g., 2019 calendar year, 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

• Subaru has laid out plans to increase its EV product offerings with four crossovers scheduled by 2026. It will also add capacity in Japan to build 400,000 all-electric vehicles by 2028.

• The Ford Ranger is getting a redesign for 2024. In addition to the pickup getting a little larger, adding a larger touchscreen, and featuring some new engine choices, it will now also have the option of a Raptor trim. Look for the redesigned Ranger to be in dealerships this summer.

• In the race for manufacturers to get their EVs to market, Fisker is falling behind with its all-electric crossover, the Ocean. It's struggling with delivery delays due to glitches in its software. Not only has it downgraded its projected output for this year, but it's also now delayed the launch of its next vehicle, the Pear, by a 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 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 once again to start the fourth quarter, when 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 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 back to one at the start of 2023. Currently, it sits at 0.99 points.

The used retail days-to-turn estimate is currently around 51.

Wholesale

Auction conversion rates remained stable last week; the overall market continues to trend into negative territory, which now leaves us wondering if there will be any room for an increase before the Memorial Day holiday. What we continue to observe in a variety of auctions is a mixture of prices both increasing and decreasing, depending on area of the country. Inventory week-over-week is trending downward. The lower level of available inventory at auctions will help keep pricing stable. As always, the Black Book team will continue to monitor and report on developing trends.

The Estimated Average Weekly Sales Rate remained at 49% last week.