Lane watch: Weekly sales rate ‘less than ideal’
Black Book reported on Tuesday that the estimated average weekly sales rate now has declined for seven weeks in row, sliding to 48% during the latest stretch that closed on Saturday.
The drop coupled with overall wholesale prices softening another 0.88% prompted analysts to say in the newest installment of Market Insights that “sales rates continue to be less than ideal with many buyers exercising caution for fear of loading up on inventory that does not turn quickly, especially when values are experiencing heavy declines week after week.”
On a volume-weighted basis, overall car segment depreciation is in line with the overall market, as last week’s decrease 0.86% nearly matched the previous week’s drop of 0.87%.
While prices within all nine car segments dropped last week, Black Book noticed values for three segments declined more than 1%, including subcompact cars (down 1.20%), prestige luxury cars (down 1.14%) and compact cars (down 1.13%).
In fact, analysts determined values for subcompact car have declined by 1.21% on average per week during the past six weeks.
Conversely, showing a little strength among cars, Black Book pointed out that premium sporty cars have averaged a weekly depreciation of 0.48% over the past six weeks.
Meanwhile, Black Book’s volume-weighted information revealed that the overall truck segment posted a price decrease of 0.90%. That’s up from the prior week’s decline of 0.65%.
Although values for all 13 truck segments dropped last week, analysts noticed only one segment sustained a price decline of more than 1% last week. That segment was compact crossovers, which softened by 1.20%.
Of note, Black Book said depreciation for full-size pickup increased last week to 0.95%, after averaging 0.49% per week during the past six weeks.
Analysts added the value decline for full-size vans of 0.41% represented the largest depreciation move for the segment since the third week of July when prices for those workhorses slid 0.55%.
“The wholesale channels remained consistently slow last week,” Black Book said in the newest report. “We are still seeing model year 2023 vehicles coming through lanes, so are expecting to see more 2024 announcements now that we are coming to the end of the fourth quarter.
“Floors in many lanes are still high, but buyer count is stable,” analysts continued. “Sellers are holding onto their floors, leading to sales rates still being down. The increase in ‘If’ sales gives us hope that sellers will start to soften their floors soon. Inventory is fairly consistent with prior weeks. We still have seen no announcements of flood vehicles running through the lanes from the hurricane.
“Consistent with recent weeks, rental companies are making a strong appearance as well as large independent dealers,” Black Book went on to say. “Franchise dealers are more selective, but most of the competitive bids were between the large independent dealers and rental companies.
“Like prior weeks, overall, the wholesale channels are still following the downward trend. The price of gas is also following in a declining pattern,” analysts added.