LAWRENCEVILLE, Ga., and McLEAN, Va. -

Wholesale market experts from Black Book and J.D. Power both spotted strengthening sales volume happening in the auction lanes.

J.D. Power called it a return to the “new” normal when wholesale auction sales of vehicles up to 8 years old reached approximately 78,000 units during the week ending Jan. 10. That volume figure came after J.D. Power reported in its Used Market Update released Friday that auction sales came in below 50,000 units during each of the prior two weeks.

Despite the improvement, J.D. Power indicated the volume reading remains below what analysts observed at the start of 2020 when sales volume reached nearly 116,000 units.

“Wholesale sales continue to run approximately 30% to 35% below prior-year levels, which is helping keep prices strong,” J.D. Power said.

The team at Black Book didn’t use the same moniker as J.D. Power to summarize the volume rebound analysts there spotted, as well. But Black Book shared in its latest Market Update released on Tuesday that dealership retail gains resulted in more units bringing out the auction hammer.

“Over the last several weeks of 2020, we saw wholesale sold volume decrease as dealers need for inventory declined as a result of weaker used retail demand. As has been the case, the drops in volume were not uniform across all auctions and platforms,” Black Book said.

“In the first full week of 2021, the average conversion rate at auctions improved. This is mainly due to stronger retail demand to finish out 2020, which resulted in dealers needing to return to the lanes to secure inventory,” analysts continued. “The improvement trend continued last week, with another increase in the success rate, particularly driven by the increase in activity at auctions in the Southern states.”

With President Joe Biden just inaugurated on Wednesday and the possibility of more stimulus payments landing with consumers, Black Book described what atmosphere that’s creating at auctions and dealerships.

“Uncertainty remains around the future of a traditional spring/tax season market this year,” Black Book said in its latest update. “Early sentiments by dealers are optimistic and auction performance of the traditional spring market vehicles, those under $12,000, have seen an uptick in demand in the last two weeks.”

Wholesale price observations

Depending on which vehicle segment — and which analyst team is compiling the data — prices are moving in many directions.

Beginning again with J.D. Power, analysts there said wholesale auction prices continued to rise during the week ending Jan. 10 after increasing 1.6% the week ending Jan. 3.

J.D. Power determined wholesale prices improved by an additional 1.1%, marking the first time that used prices have increased for two consecutive weeks in its data set since early August.

Analysts pointed out that wholesale prices are now 24% higher than their trough set in April and 5% above their level at the beginning of March.

J.D. Power indicated that wholesale prices for mainstream segments climbed throughout that space, with small cars leading the way with a price rise of more than 3%. Prices for compact and large cars increased 1.3%, and prices for midsize cars rose 1.5%, according to J.D. Power, which added that price upticks for large pickups weren’t far off that pace at 1.2%.

Prices for always popular SUVs didn’t move as much in J.D. Power’s data set as analysts pegged the increase for midsize SUVs at 1% and for small SUVs at just 0.4%

“On the premium side, prices weren’t quite as strong as their mass-market counterparts, though price movement was generally positive,” J.D. Power added.

Over at Black Book, analysts there said volume-weighted data showed overall wholesale prices declining last week for the 19th week in a row. However, the dip for both cars (down 0.52%) and trucks (down 0.20%) wasn’t as significant as the previous week when they came in at 0.91% and 0.74%, respectively.

“The near-luxury and luxury car segments saw steeper declines in prices this past week as available supply increased on the lanes and remarketers lowered their floors,” Black Book said. “However, volume remains low in the premium sporty and prestige luxury car segments which is continuing to see lower than normal weekly changes.

“The smaller car segments — subcompact and compact — have been on a race to the bottom over the last several weeks,” analysts continued. “But this past week, the compact car segment experienced the lowest weekly change for this segment since the week of Thanksgiving.”

Also of note, Black Book mentioned that analysts are continuing to see softening in values in the 1500 level trucks, but the larger 2500 and 3500 level units remain strong as prices for those more robust pickups edged just 0.20% lower last week.

“Full-size crossover supply remains tight, and with low fuel prices, the demand has remained strong. This was the second week in a row of an increase in values,” Black Book said.