Lane watch: With Big 3 & UAW reaching tentative deals, wholesale market normalcy expected
The United Auto Workers (UAW) has reached tentative contract agreements with Ford, Stellantis and General Motors following stressful negotiations and six weeks of striking workers walking picket lines.
Now with assembly plants gearing up for a return to normal activity, Black Book anticipates the wholesale market going back to what consignors and dealers typically see during the final two months of the year.
Black Book shared its latest Market Insights on Tuesday, reporting that overall wholesale prices decreased 0.60% last week. That’s more than double the depreciation analysts recorded a week earlier.
“Last week, the market experienced larger declines, particularly in the truck segments,” Black Book said in the report. “The expectation is that once the strike is officially over, the market will return to consistent depreciation through the end of the year.”
With prices perhaps heading for more consistency, might it mean the auction hammer will come down more frequently? Black Book indicated its estimated average weekly sales rate actually dropped back to 52% last week.
“At the same time, auction conversion rates saw a small uptick in the number of vehicles being sold, showing that sellers are willing to come down on floors to get the sale,” Black Book added.
If those sellers were offering cars last week, Black Book noticed overall car values decreased 0.53% on a volume-weighted basis.
Older cars softened in price a bit more than their newer contemporaries last week. Black Book indicated prices for 0- to 2-year-old cars slid 0.31%, while values for 8- to 16-year-old cars declined 0.56%.
Analysts noticed prices in all nine car segments decreased last week, with sub-compact cars leading the way for the second week in a row. Last week’s drop for those fuel sippers was 0.82%, as a week earlier it was 1.04%.
In the truck department, Black Book determined its volume-weighted information showed overall truck values decreased 0.63% last week.
A week earlier, truck values ticked down just 0.20%, according to Black Book, which also mentioned all 13 truck segments declined in price last week.
Analysts noted prices for 0- to 2-year-old trucks declined 0.52% on average, while values for 8- to 16-year-old trucks dropped by 0.68%.
Black Book pointed out that the compact van segment had the largest value decline last week, dropping 1.80%.
“This is a very small segment that has only a few competitors so small dollar changes have a large percentage impact,” analysts said.
Black Book added depreciation intensified for small pickup, which slid another 0.63%.
“After two weeks of increases early in the strike, the segment is now returning to normal depreciation for this time of year,” analysts said.