Wholesale Prices Down but Stable as Volume Increases

Tom Webb
Chief Econ­o­mist
Man­heim Con­sult­ing

While whole­sale prices did see their first drop after four pre­vi­ous months of increase, they did remain sta­ble over­all. The Feb­ru­ary Man­heim Used Vehi­cle Val­ue Index to a lev­el of 125.1, which rep­re­sent­ed an increase of 1.5% from a year ago. The num­ber of vehi­cles enter­ing whole­sale chan­nels grew sig­nif­i­cant­ly in Feb­ru­ary. Prices remained above the trend due to automak­er pric­ing dis­ci­pline on the new vehi­cle side, and effec­tive vehi­cle man­age­ment prices by deal­ers on the used vehi­cle side.

Here’s the Man­heim Used Vehi­cle Val­ue Index on the Feb­ru­ary mar­ket

Dis­ap­point­ment in New Vehi­cle Sales Did Not Bring Aggres­sive Pro­mo­tions:
Some man­u­fac­tur­ers have decid­ed to slow pro­duc­tion rather than force the mar­ket.

Most Deal­ers Report­ed Good Oper­at­ing Results in Used Vehi­cle Depart­ments:
Lease returns and new­er trade-ins pro­vid­ing wider mix and deal­ers have been opti­miz­ing inven­to­ry to make most of it.

Com­pact Cars Weak­est Seg­ment of Whole­sale Pric­ing in Recent Months:
That’s not sur­pris­ing giv­en slow sales and high days’ sup­ply on the new vehi­cle side.

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