If your store can turn luxury cars quickly, your opportunity for decent gross might be at hand stemming from how wholesale prices for those high-line units are moving.
The newest Black Book Market Insights report showed wholesale prices for luxury cars again softened at a much higher rate than the overall car reading.
“Luxury-segment declines continue to offset the strength of mainstream vehicles, which remain relatively strong,” Black Book executive vice president operations Anil Goyal said in the latest report.
Volume-weighted, analysts indicated overall car segment values decreased by 0.15% last week. In comparison, market values for cars ticked just 0.04% on average during the past four weeks.
That movement also mirrored what happened a year ago as Black Book said the same relative four-week period in 2018 also produced an average dip of 0.04%.
Among cars nowadays, analysts noted values of the prestige luxury and luxury car segments decreased the most, dropping by 0.61%.
Conversely, the full-size car segment climbed 0.14%, extending a streak of increasing to four consecutive weeks.
Again volume-weighted, Black Book determined overall truck segment values (including pickups, SUVs, and vans) decreased by 0.16% last week. That’s slightly more than the previous five-week average drop of 0.11%.
Analysts added that they spotted nearly the same average decline in truck values during the same relative five-week stretch last year.
In the truck space, Black Book pointed out the minivan segment decreased the most, sliding by 0.72%, followed closely by the full-size luxury crossover/SUV segment at 0.67%.
Moving on from the numbers, a wide range of anecdotes surfaced from Black Book representatives stationed at nearly 60 sales each week. Here is the rundown from some of those lane observers:
— From South Carolina: “Attendance was down even though the consignment quantity was good. With more vehicles and less competitive bidding, it was not surprising that the market was stable to down a bit.”
— From Florida: “The rental and off-lease lanes were holding their floors, resulting in a higher number of no-sales.”
— From Wisconsin: “Consignment has returned to more normal levels. Looks like trucks will remain strong for several more weeks here. Cargo vans are so scarce that if you run one you are guaranteed a lot of action.”
— From California: “The market remains very positive here as dealers continue to need more vehicles. As a result, sales percentages remain high.”
Update on the specialty markets
With this report being the first one of the month, analysts also provided their insights into how the specialty markets are functioning.
Here is what Black Book shared:
— Collectibles: “The high-end auctions held in Monterey every August are closely watched by the collector car hobby, as they tend to set the tone for the remainder of the year. This year’s total of $264 million was quite a bit less than last year’s $375 million. While there are surely many reasons for the decline, many attendees felt that economic uncertainty and the somewhat stagnant stock market were the primary drivers of the lower sales rates.”
— Powersports: “Whether it’s the end of summer, recent economic news (yield curve inversion, anyone?), or other factors at play, prices have taken a big hit this month nearly across the board as all of the motorcycle and off-road segments are down significantly.”
— Recreational vehicles: “As we near the end of summer, and approach the beginning of fall, we’re seeing the market begin its normal seasonal shift. The bulk of consumer RV purchases is done in the spring and summer, so that’s when dealers typically stock up on inventory. As colder weather approaches, dealers are beginning to sell down their existing inventory, and are only buying to fill specific needs on their lots so as to not have to carry too many unsold units over the winter.”
— Medium duty: “Light-duty commercial units have been relatively stable over the past couple of months despite an increase in supply. Auction prices continue to fall as new and used inventory increases across the country.”
— Heavy duty: “Construction units once again did well at auction, relative to the other HD segments. Regional and over-the-road segments have continued heavy depreciation since our last report. A lack of demand coupled with excessive supply has created a market where buyers can pick and choose their units and their price.”