April 2022 Auto Market Update

A quick recap of industry-related headlines for April 2022:

• The overall market is still reporting declines, but the Car segments moved into positive territory last week.
  • Older model years (8-to-16-year-olds) also had another week of outperforming newer model years.
• We are also starting to see the higher gas prices affecting the demand – all of the non-luxury car segments are appreciating at price and all larger crossover / SUV and pickup segments are depreciating at an accelerating rate.
• On a volume-weighted basis, the overall Car segment increased by +0.12%. For reference, the previous week, cars decreased by -0.02%.
• The volume-weighted, overall Truck segment decreased -by 0.28%, compared to the prior week’s decrease of -0.21%.

Weekly Wholesale Index

The calendar year 2020 and 2021 ended with used wholesale prices at elevated levels. With economic patterns (including the automotive market) driven by the pandemic, normal seasonal patterns (e.g., 2019 calendar year) in the wholesale market were not observed for most of the last 2 years. We saw a similar picture in 2009, at the end of the Great Recession.

The calendar year 2021 did not have typical seasonality patterns as the market had rapid increases in wholesale values for the majority of the year. The Wholesale Weekly Price Index reached the highest point of the year at the end of December, reporting over 1.51 points.

Now, in the calendar year 2022, the index has been reverted back to the 1.00 mark and overall wholesale prices remained relatively stable in the month of January (green line). As we moved into March, the Wholesale Weekly Price Index continued to decline and is now just below the 2019 trend line, around 0.97.

The graph below looks at trends in wholesale prices of 2-6-year-old vehicles, indexed to the first week of the year. The index is computed by keeping the average age of the mix constant to identify market movements.