February 22, 2021
We are all striving for balance in our lives. While it is always the goal, it is seldom achieved or maintained.
As for the car market, balance is also the nirvana we seldom achieve. We hope for lots of inventory (not too much as to cause a glut) alongside strong retail demand that fuels steady, predictable wholesale pricing (not too high, but strong enough to create abundant confidence with no one feeling like they are getting dragged over hot coals to buy inventory).
Right now, the imbalance of supply and demand is far from that nirvana. Wholesale inventories are very light, driving a feeding frenzy that is almost unprecedented. Last week, Spokane’s lane one trucks sold 100% with lane two selling 94%. Having 100% conversion in a dealer consignment lane is a first for me. Some fleet sellers seem to be getting a little greedy. Knowing they have little precious inventory, they are passing on some very strong bids, stretching buyers who are desperate for inventory.
Some new car dealers with inventory are taking abundant levels of trades and are doing very well. For those not so fortunate, buying on the open market is a challenge for sure.
We are working hard to find inventory and our auctions are holding their own, but with 80% sales, it is tough to fill the lanes each week. Like all things, this is temporary; things will normalize, but not for a while.
In closing, I will say it is much better for us all to have strong demand and a shortage imbalance than to have cars stacking up everywhere with no buyers. For this, we can all be thankful.
Thank you for your continued support –
Bob McConkey – CEO & President