Wholesale Auction Values Plummet More Than 4% in August

The pause in the continued decline in auto wholesale values in late July was apparently only a lull in the continuing slide. The past three weeks have shown over a 4% drop in auction values alone.

Market Insights – 8/29/2023

Wholesale Prices, Week Ending August 26th

Wholesale Auction Values Plummet More Than 4% in August

Wholesale declines continued last week, but the rate of decline did show some signs of slowing down, with the overall rate depreciation coming back under 1% for the first time this month. Some dealers are starting to plan for the potential of a UAW strike and that is pushing them to the lanes to ensure they have inventory “just in case”.

Car Segments

On a volume-weighted basis, the overall Car segment decreased -0.83%. For reference, in the previous week, cars decreased by -1.73%.
The 0-to-2-year-old Car segments were down -0.37% and 8-to-16-year-old Cars declined -1.49%, compared with the prior week’s declines of -1.20% and -1.90%, respectively.
Eight of the nine Car segments decreased last week, and three of those had declines exceeding 1%.
Premium Sporty Car increased +0.46% last week. The size of the segment is small and last week’s performance was heavily influenced by strength of the Chevrolet Corvette.
For the last three weeks, the Compact Car segment was declining more than 2% each week- the largest decline of any car segment during that time period, but this week, the depreciation slowed to -1.37% and the highest depreciation went to the Sub-Compact Car segment, which dropped -2.10%. Sub-Compact Car has now averaged -1.59% depreciation per week, over the past four weeks.

Truck / SUV Segments

Weekly Wholesale 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.

Wholesale

For four weeks in a row now, the market has shown heavy declines in both the car and truck segments, but last week, declines started showing signs of slowing down. With increases in no-sales seen last week buyers are showing signs of being more cautious about the uncertainty of the wholesale market. Other factors contributing the heavy declines include high fuel prices and interest rates continuing to rise. Now, with a looming UAW strike coming soon, which could potentially reverse this downward trend, no one seems to know what to expect next, with this coming weeks results.

That’s why here at Black Book, we have our team of Analysts focused on keeping their eyes on the market, watching for developing trends and insights.

The estimated Average Weekly Sales Rate declined to 48%.