Lane watch: Signs of stability appear as January concludes
Black Book’s experts happily used the term “stability” multiple times when compiling their latest installment of Market Insights, which was released on Tuesday.
Black Book got to use that word because overall wholesale prices softened 0.33% during the week that included the last day of January and the industry conferences in Las Vegas.
Plus, that exact depreciation reading surfaced for the second week in a row, according to Black Book’s report that also mentioned the estimated average weekly sales rate was stable at 55%.
“Terms such as ‘normalcy’ and ‘stability’ signal a refreshing change following four years of volatility, aptly characterizing the present market conditions,” Black Book said. “The market’s downturn last week was in line with the previous week’s trend, marking the end of January 2024.
“As we anticipate the arrival of the spring market, there are promising signs, such as the compact and sporty car categories, which showed an uptick in the last week,” analysts continued.
Delving further into the car market, Black Book’s data showed overall car wholesale prices softened 0.22% last week on a volume-weighted basis. A week earlier, they ticked 0.26% lower.
And perhaps pointing to topics discussed often at industry events last week in Las Vegas — affordability and consumer demand — Black Book pointed out values for cars 8 to 16 years old dipped just 0.10%.
As Black Book referenced, analysts reported that prices for compact cars increased for the fourth consecutive week, appreciating by 0.26% a week ago.
Drilling deeper into those specific units, Black Book discovered prices for 8- to 16-year-old compact cars now have climbed for five weeks in a row. And values for compact cars 2 years old and younger rose by 0.58%, which was the largest gain for those units since last March.
However, Black Book pointed out that values for subcompact cars aren’t enjoying the same appreciation as their compact counterparts. Analysts said that while the depreciation for subcompact cars slowed last week (0.58%), the movement came after prices for those fuel-sippers dropped by more than 1% for three straight weeks.
In the truck department, Black Book said its volume-weighted data showed overall truck values decreased 0.38% last week, nearly mimicking what analysts spotted a week earlier when truck prices dipped 0.36%.
Perhaps showing more of that stability, Black Book indicated truck values moved lower at nearly the same pace no matter the age. Units up to 2 years old dropped in value by 0.36%, while prices for 8- to 16-year-old trucks softened by 0.30%.
Analysts mentioned 12 of the 13 truck segments declined last week with only full-size crossovers/SUVs posting a value increase of just 0.03%.
Black Book pointed out that while prices for compact cars are moving higher, values for compact crossovers/SUVs are sliding notably. After softening another 0.43% last week, analysts said prices for those specific vehicles now have declined for 18 weeks in a row with the average drop being 0.87% during that stretch.
Now that the automotive industry is moving deeper into February, Black Book closed its updating by repeating the theme that surfaced during the opening month of the year.
“One month into 2024 and the wholesale market continues to show more stability; less depreciation in both car and truck segments in January compared to December,” Black Book said. “All indicators show this trend will continue in February and we should see more improvement in the market in the days to come. Auction conversion and inventory remained stable this week, another positive sign.
“As always, our team of analysts are focused on keeping their eyes on the market, watching for developing trends, and gathering insights,” Black Book went on to say.