Beggs: Christmas Week Sees Slow Wholesale Market
In the week leading up to Christmas, folks may have been more concerned about last-minute holiday gift shopping and college football than they were about buying cars, something that analyst Ricky Beggs believes led to a “slower than normal” wholesale market.
In fact, given the limited activity in the auction lanes, the number of wholesale adjustments for the week ending Dec. 23 was the lowest amount the market has seen in almost four months, Black Book’s managing editor noted in the Dec. 26 "Beggs on the Used Car Market" video report:
Specifically, there was an average of 1,425 adjustments a day that week.
Adjustments hadn’t been that sparse since Sept.1.
Offering some commentary on the rather quiet week, Beggs said the fact that Christmas week was “a little slower than normal in the wholesale market arena” — with last week expected to look the same once Black Book completes the data — is “nothing to be alarmed about.”
He shared: “There was just more interest in last minute shopping for smaller gifts than cars and possibly even more excitement building about the remaining college bowl games around the country.
“As expected at many auctions this past week the crowds were good, but the aggressive bidding has declined quite a bit. This is typical, as many dealers are lying low during this end of the year stretch, while describing the auction as ‘a good day for December,’” he continued. “A couple of dealers even commented that we should be prepared for higher prices by the first of February 2012."
Sharing more details about the week’s wholesale adjustments, Beggs added: "The number of adjustments relating to clean and average was more normal, as this was the first time in the past four weeks where the number adjusted by condition was very similar.”
Overall, close to a third (31 percent) of the changes were upward adjustments. As such, the overall change was the most moderate decrease — a dip of a little more than $47 — in about six months.
The last time the overall decline came in this low was the week of June 24 (decline of $35).
Breaking it down, trucks were down $35, on average, while cars fell $52.
Looking at trucks in more detail, there was no segment showing an increase, which is the first time this has happened in the last three weeks. That said, rather modest declines were spotted in the cargo and passenger minivan segments (each down $3), as well as the compact SUV segment (down $8).
Meanwhile, full-size crossovers (down $148) and luxury SUVs (down $96) fell significantly.
On the car side of the market, the decline was typical for what has been spotted lately.
Beggs noted that the “cars are struggling slightly more than the trucks,” as just one segment — upper midsize cars with a $12 dip — had a decline of less than $25.
“For the past two weeks, the segment with the largest decline was the prestige luxury cars at $112 and the premium sporty cars at $73,” he explained.
“As you think about the numbers, the auction activity, just like the calendar is ‘winding down’ while preparing for a great ‘market in Feb. and March,’” Beggs stated. “Next week could bring a less active market, or a time to get a head start on the upcoming tax season.”