Black Book Shows Rebound

By Staff Writer June 17, 2020 460

Black Book reported good news on the retail and wholesale fronts in its June 16 COVID-19 Market Report.

“Fueled by continued stimulus payments, the success of the Federal Paycheck Protection Program, and unsatisfied demand from April and May, last week continued a story of rebounding wholesale prices, with volume-weighted overall car and truck segments both showing gains for a third week in a row, gaining 0.62 percent overall,” the report stated. “As for specifics, the overall car segments increased by 0.88 percent (compared to 0.16 percent the prior week) and the overall trucks and SUV segments increased again this past week at 0.52 percent (compared to 0.08 percent the prior week).

The Nissan Sentra is popular with used car buyers this year
The Nissan Sentra continues to be popular with used car buyers in 2020

“Wholesale prices declined 1.5 percent in May – a substantial improvement compared to April when prices dropped by 5.9 percent. As a result, Black Book’s Seasonally Adjusted Retention Index had a very respectable comeback in May, only dropping by 0.7 percent (vs. a 6.9 percent drop in April). The decrease in April was driven almost exclusively by the collapse in consumer confidence, along with high levels of uncertainty about the financial markets due to the COVID-19 pandemic. Since the middle of May, we have observed the stabilization of prices, as shelter-in-place orders are being relaxed throughout the country.”

The report also stated auction sales volume is “finally returning to pre-COVID-19 levels, although most auctions are still operating in a digital only environment.” Black Book also showed an increase in rental units sold, compared to previous weeks.

Black Book expects “a large, incremental influx of used inventory to hit the marketplace over the next six months, coming from prolonged lease return delays, downsizing of rental fleets (including the expected sell-off of a large number of Hertz’s units), increased repossessions, and un-sold inventory from the March-May time period.”

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Last modified on Wednesday, 17 June 2020 16:16