Lane watch: 2 specific vehicle segments still drawing dealer interest


Judging by the wholesale price movements, if dealers can add compact luxury SUVs or full-size pickups to their inventory, they will. Otherwise, used-car managers appear to be reducing their enthusiasm for raising inventory levels higher with only about a week remaining in September.

Analysts shared those findings and more in Black Book’s latest COVID-19 Market Insights released on Tuesday.

“Retail demand hasn’t softened for all parts of the country, but much of the dealer sentiment is changing. September is seeing demand falter at many dealerships. This is a time of year that typically sees sales volume decrease,” Black Book said in the latest report.

“Dealers continue to source used inventory to stock their lots, but the pace is slowing,” analysts continued. “Some are hoping another round of stimulus will give their business another boost, but they are being cautious to not load up with too much high-priced inventory right now in case that doesn’t happen.”

When looking at Black Book’s volume-weighted data in the truck space, overall values — including pickups, SUVs and vans — dipped by just 0.02% last week.

Minivans dropped by a much greater rate as values for those particular units sunk 0.64%. What kept minivans from pulling down the overall segment reading more were those previously mentioned units that dealers seem to want.

In fact, Black Book reported values for those compact luxury SUVs rose 0.39% while values for full-size pickups that seemingly always are in demand climbed by 0.54%

“Full-size trucks continued to show dominance in the lanes as the short supply of new trucks is driving up the demand and prices of used,” analysts said.

Meanwhile on the car side, Black Book’s volume-weighted information showed overall segment values decreased 0.38% last week, surpassing the previous week’s decline of 0.26% that’s been part of a three-week stretch of downward movement.

Analysts pointed out that declines for the compact, prestige luxury, mid-size, sub-compact and sporty car segments all topped 0.40%.

“Premium sporty and near luxury car were the only segments to show continued appreciation,” Black Book said. “However, sales rates on luxury units were lower this past week, so it is expected those values will also begin to decline as sellers will likely adjust floors.”

And speaking of floors and other activities associated when the hammer drops, analysts shared a few other trends they noticed when watching online sales or conversing with their auction and dealer contacts.

“Bidding lost a lot of luster over the last week, especially in some of the luxury manufacturer lanes that experienced some extremely low sale rates; many that haven’t been seen since the early weeks of the pandemic,” Black Book said. “Sellers that appeared to have adjusted their floors or had full-size trucks to sell experienced the highest success rates. 

“If bids were prevalent again last week,” analysts added. “Throughout the summer, lanes didn’t have representation, but bidding activity was so strong that bids easily exceeded the floors. But now that bidding activity has slowed down, the lack of representation is leading to an increase in final bids that are waiting for a seller response.” 

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