Wholesale Auction Result Decline Accelerates

Market Insights – 5/21/2024

Wholesale Prices, Week Ending May 18th, 2024

The overall market experienced an acceleration in the rate of decline last week, with all but two segments reporting a decrease in value. Although there was some reduction in auction inventory, the volumes being sold by the larger sellers, especially in the OEM lanes, are reminiscent of those seen pre-COVID.

Wholesale Auction Result Decline Accelerates

On a volume-weighted basis, the overall Car segment decreased -0.09%. For reference, in the previous week, cars decreased -0.01%.
The 0-to-2-year-old Car segments were down -0.11% and 8-to-16-year-old Cars increased +0.03%.
Two of the nine Car segments increased last week.
Last week, the Sporty Car segment extended its upward trend, rising by +0.20%, which represents the eighth consecutive week of gains. On average, the segment has seen a weekly increase of +0.32%.
The Sub-Compact Car segment continued to see significant decreases, falling by -0.41% last week. This marks the sixth week in a row of declines for the segment, with an average weekly drop of -0.37%. Although these vehicles are considered “affordable,” the segment witnessed only four weeks of increases in April. In contrast, its larger counterpart, the Compact Car, experienced a streak of seventeen consecutive weeks of growth before seeing a slowdown.

The volume-weighted, overall Truck segment decreased -0.29% compared to the decline seen the prior week of -0.14%.
The 0-to-2-year-old models declined -0.24% on average and the 8-to-16-year-olds decreased by -0.34% on average.
Last week saw a decline across all thirteen Truck segments, marking the first instance of universal declines within these segments since mid-January.
Full-Size Vans have consistently depreciated over the past seven weeks, with an average weekly decline of -1.00%. Although the Compact Van segment has also been depreciating, it has been doing so at a slower pace. Nevertheless, last week saw an increase in the rate of decline for Compact Vans, falling by -0.62%, a notable increase from the previous week’s decrease of -0.13%.
Last week, the Full-Size Crossover/SUV segment saw a -0.29% decrease, marking an end to its ten-week streak of consecutive increases.

Weekly Wholesale Price Index

The graph 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.

The wholesale market experienced a downtrend for most vehicle types last week, except for Full-Size Car and Sporty Car which continued to increase. Another trend that we have noticed is a small decline in auction inventory and noticeably in the dealer lanes, this could happen because dealers are keeping more of their trade-ins rather than bringing them to the auction.

Average auction sales rate this week was 56%, down –1% from previous week.

As always, our team of analyst are focused on the keeping their eyes on the market for developing trends and gathering insight.