Market Insights – 5/23/2023

Wholesale Prices, Week Ending May 20

Declines continued last week for the overall market, and only a few segments are still reporting small increases. The trend for 2- to 8-year-old vehicles, a 0.13% decline, is reflective of the other vehicle segments with 0- to 2-year-olds declining 0.12% and 8- to 16-year-old models declining 0.17%.

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

Car segments                   -0.16%         -0.15%          -0.22%

Truck & SUV segments   -0.12%        -0.16%          -0.11%

Market                              -0.13%        -0.15%          -0.16%

Car Segments

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

• Only two of the nine car segments increased last week, but increases were minimal, with compact car increasing 0.03% and sporty car gaining 0.01%.

• Subcompact car reported the largest decline, down 0.47%, the largest decline for the segment since the second week of February.

• Sporty cars continued to increase, but the rate of gain was the lowest since early January.

Truck / SUV Segments

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

• Ten of the 13 truck segments reported decreases last week.

• Full-size crossover 0.29%, minivan 0.13%, and full-size pickup 0.09% were the only truck segments to report gains last week.

• Compact van, -0.46%, and compact crossover, -0.43%, had the largest declines.

• Small pickup declined for the first time in 14 weeks.

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., the 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

• The redesigned 2024 Toyota Tacoma has officially been revealed, now with lots of updates and new features that range from new engine options to a removeable Bluetooth speaker. Look for the nonhybrid models to hit dealers’ lots this year.

• The wait for the ID.Buzz is almost over, with the debut of the long wheelbase variant that will make it to the U.S., set to be revealed on June 2; However, it won’t be available for purchase until next year as a 2025 model-year vehicle.

• The EPA range for the 2024 Chevrolet Silverado EV work truck beat what General Motors originally announced. The truck will be capable of up to 450 miles, which is 50 more than GM originally estimated. The work trucks are available only for fleet customers.

• The British chemicals company Ineos will debut the Grenadier in the North American market this year. The old-school-looking SUV is expected to compete with the Land Rover Defender and will have a starting price of $73,100.

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 the year. Currently, the index sits at 0.99 points.

The used retail days-to-turn estimate is currently around 50.

Wholesale

We are seeing more no-sales and dealers holding tight on their floors as we roll into the Memorial Day holiday week. 1500 series trucks are one of the vehicles still moving up in value but at a slower pace than we have recently seen. We are still seeing lower inventory at auctions across the country, despite the relative price stability/decline being reported on most segments.

As always, the Black Book team will continue to monitor and report on developing trends.

The Estimated Average Weekly Sales Rate dropped to 48% last week.