Lane watch: UAW strike and gas prices influencing latest wholesale price movements
With about 25,000 factory workers who assemble vehicles for Ford, General Motors and Stellantis on strike and oil still costing more than $90 per barrel, Black Book continues to see ramifications manifest in the auction lanes.
According to the newest installment of Market Insights, Black Book reported wholesale values softened just 0.08% during the week that closed on the final day of September and the third quarter. Black Book added that the estimated average weekly sales rate increased to 54%.
“We are now moving into the third week of the United Auto Worker (UAW) strike, and now roughly 25,000 UAW union members are actively striking, with more plants being affected in Chicago and Lansing, Mich., since the strike began,” Black Book said in its report. “As a result, the wholesale market is starting to show signs of improvement, with demand increasing at auction, as many are expecting supply disruptions to come later.
“As the UAW strike continues on, the market has settled into a period of stability when it comes to pricing trends. However, buyer interest has been up at auctions with the conversion rates continuing to climb each week,” Black Book continued.
Meanwhile, the latest update from AAA indicated that the national average for a gallon of gas sat at $3.83.
“Oil is stubbornly staying above $90 per barrel for now, and it’s the main ingredient in gasoline,” AAA spokesperson Andrew Gross said in a news release. “Gas prices will likely keep falling, but it’s going to be slow and unsteady, so expect some days where it might edge higher a bit.”
Black Book noticed values for gas-sipping cars actually ticked up slightly last week. Prices for subcompact cars nudged up 0.04% and values for compact cars edged 0.02% higher. A week earlier, analysts noticed prices for those vehicles declined 0.48% and 0.35%, respectively.
Prior to last week’s value increase, analysts said the compact car segment had been declining “consistently” for the previous 18 weeks, generating an average weekly decline of 0.94%.
All told, Black Book reported that overall car segment values decreased 0.15% on a volume-weighted basis. That’s just about half what analysts spotted during the previous week when car prices decreased by 0.29%.
That previously mentioned stability showed in that 0-to 2-year-old car segments dipped just 0.03% in value while prices for 8- to 16-year-old cars declined only 0.09%.
Black Book indicated prices for seven of the nine car segments decreased last week, with prestige luxury cars leading the way with a 0.44% drop.
Looking at volume-weighted truck information, Black Book determined overall truck segment values decreased only 0.05%.
While prices for 0-to 2-year-old models didn’t move, analysts said prices for 8- to 16-year-old trucks declined 0.25%.
Perhaps reflecting what’s happening on the strike front, Black Book pointed out three of the 13 truck segments posted value increases last week. That group included small pickups (up 0.26%), midsize crossovers (up 0.19%) and compact crossovers (up 0.09%).
Moving in the other direction, analysts said prices for compact vans dropped another 1.28%. The segment now has declined for 25 consecutive weeks, with an average weekly decrease of 0.62%.
Whenever the UAW strike has notable progress or prices at the pump abate, Black Book said, “As always, we have our team of analysts focused on keeping their eyes on the market, watching for developing trends and gathering insights.”