Throughout the year, Galves makes constant attempts to keep our subscribers up-to-date on what is happening within the wholesale market. Our American, Foreign and Truck books contain brief statements on Page 1 that appear under the heading "Market Conditions" and we publish an expanded "Market Conditions" page here on galves.com....
Last updated Friday, February 21, 2014
Bad Weather, Stable Market
We’ve been a little hesitant to issue any sort of definitive report or prediction on current and future market conditions because the weather has been so disruptive to much of the market that is our primary focus. It has been a dismal winter and the best we can say about the market is that it has been relatively stable. It has clearly not yet reacted with the strength that we expect at this time of year. In normal years in mid-February dealers would be competing vigorously for inventory in anticipation of strong retail sales as the weather breaks in the coming months and consumers come out of hibernation. Thus far the weather has simply mitigated against that. We do expect that when the weather breaks and spring seems like an actual possibility the market will heat up quickly and strongly in expectation of a retail feeding frenzy fueled by pent-up demand. Would it be shocking news if the market over-reacted to the consequences of the most severe winter we’ve experienced in years?
Declines on Luxury
While most of the market segments have stabilized, the two segments that have continued to falter have been the European and Asian luxury segment and very late model vehicles that have moderate supply or more. Both those segments have continued to fall, sometimes significantly. Generally speaking, the more expensive the vehicle the more dramatic the decline. Things like very late model Audi A8’s and Mercedes S550’s have dropped thousands over the past couple of months. More moderately priced late model vehicles in high volume – think Infiniti G37s – normally quite stable, have taken a relative beating.
4WD’s and Pick-ups Strong
It should be no surprise that four wheel drive vehicles of all variations are getting attention and we expect will be very strong when dealers and consumers resume shopping. Pick-ups should lead the way while SUV’s and crossovers, full size to compact, will be close behind.
Despite the weather we are beginning to see sport coupes and convertibles stabilize and we expect that to continue and that they will strengthen once we get a few bright, warm days. In fact, we would not be at all surprised to see a very strong market materialize abruptly once consumers and dealers get the sense that the uncommonly nasty weather is behind us.