Since April was the first month in which sales occurred entirely within the economic shutdown, we were very curious to see how pricing and volume would turn out. We were somewhat encouraged by pricing data...
Our analysis of how direct-to-dealer wholesale prices have performed since the start of the virus situation.
Compared to wholesale auction prices over the same period, reveals that direct to dealer / upstream wholesale prices have held up far better than prices at physical wholesale auctions. For the week ending April 26, direct-to-dealer wholesale prices were down around 6% versus the beginning of March, a relatively small decrease when compared to the 14% decline recorded for wholesale auction prices over the same period.
May 1 marks the first milestone in the very gradual reopening of the American economy. Many states have slightly dialed back the most stringent restrictions on business and public activity, cracking open the door for increased commerce. What does this mean for the used truck market?
In normal times, pricing trends in the retail market usually lag the auction market by roughly 3-5 months. In our current environment, trucks in both channels are losing value fairly rapidly, although retail pricing might not be falling quite as sharply as auction pricing.
The volume of 4-7 year-old trucks sold at auction was healthier than expected in March, given the fact that most auctions moved to online-only. Pricing was flat to slightly lower than February, which outperformed our expectations.
Looking at auction activity through the first half of the month, sales volume and pricing performed better than expected. Volume will probably end up similar to February, which was the last pre-virus month.