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Wholesale Prices, Week Ending March 13^th

This past week saw another round of all segments reporting increases in wholesale values. New and used inventory shortages coinciding with the traditional spring/tax season bump, as well as an additional round of stimulus, has led to larger than normal weekly gains in values. With used supply remaining tight, remarketers are raising floors and holding firm.

	This Week	Last Week	2017-2019 Average (Same Week)
Car segments	+1.12%	+1.11%	-0.12%
Truck & SUV segments	+0.99%	+0.58%	-0.34%
Market	+1.04%	+0.76%	-0.25%

Car Segments

• The Car segments had a second week in a row of value gains exceeding 1% (+1.12% last week vs +1.11% the prior week).
• Mainstream segments all reported gains exceeding +1% this past week, with Full-Size Car (+1.57%) being the largest.
• The Near Luxury Car segment was slow to experience increases in prices, but the rate of increases has been gaining each week with this past week’s rate growing to +1.18%.
• Sporty Cars broke the 1% level again this past week, but the rate of increase (+1.02%) did slow down compared to the +1.78% and +1.89% gains the previous two weeks.

Truck Segments

• The Truck segments had larger gains this past week at +0.99%, compared to +0.58% the preceding week.
• Eight out of the thirteen truck segments reported gains exceeding 1%, with three of those eight being greater than +1.50%.
• The Sub-Compact Crossover segment had the largest level of truck segment increases for a third week in a row at +1.59%.
• Full-Size Trucks doubled the rate of increase from +0.50% two weeks ago to +1.00% last week. The Small Pickup Truck segment also had a significant increase to +1.52%, compared to +1.06% the prior week.

Newer Used Vehicles (0-2-year-old)

Driven by an extreme shortage of rental returns and limited inventory of new vehicles, the price trends of newer used vehicles have started to diverge from older units. The table below shows the average weekly price changes for 0-2-year-old vehicles.

	This Week	Last Week	2017-2019 Average (Same Week)
Car segments	+1.49%	+1.28%	-0.12%
Truck & SUV segments	+1.32%	+0.68%	-0.20%
Market	+1.37%	+0.85%	-0.16%

Weekly Wholesale Index

2020 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 year. We saw a similar picture in 2009, at the end of the Great Recession. It appears that 2021 will not have typical seasonality patterns. So far, the spring market arrived about 7 weeks earlier and with much stronger price increases compared to a typical pre-COVID year. Graph below looks at trends in wholesale prices of 2-6-year old vehicles, indexed to the first week of the year.

Retail (Used and New) Insights

• Jeep unveiled the all-new Wagoneer and Grand Wagoneer last week with loads of luxury features that on some trim levels will push the MSRP over $100,000 and will add competition to the Cadillac Escalade and Lincoln Navigator.
• General Motors announced the next GMC electric vehicle, a Hummer SUV, will be unveiled on April 3^rd. Production is expected to begin in early 2023.
• Kia announced their new nomenclature for their upcoming electrified line-up will be “EV” followed by a number, with the first vehicle being the EV6 crossover.
• GM is idling another plant this week through at least the end of the month as a result of the chip shortage. The Lansing, MI plant is where the Chevrolet Camaro and Cadillac CT4 and CT5 are produced.

Used Retail Prices

With the proliferation of ‘no-haggle pricing’ for used-vehicle retailing, asking prices accurately measure trends in the retail space. Retail demand slowed down leading up to the December holidays, and thus resulted in declining retail asking prices over the last several weeks of 2020. As demand rebounded in January, retail prices seemed to lag wholesale prices – retail asking prices continued to decline throughout January and remained stable in February. This analysis is based on approximately two million vehicles listed for sale on US dealer lots.  The graph below looks at 2-6-year-old used vehicles (similar to our wholesale price index).