Used-Car Prices Are Finally Dropping
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Right before the global financial crisis, former Citigroup Inc. Chief Executive Officer Chuck Prince famously said that as long as the music is playing, you’ve got to get up and dance. During the pandemic-era car-buying frenzy, no business spent more time on the dance floor than the global auto industry, which had never before enjoyed so much pricing power.
In 2023 the market is set to quickly lose traction, UBS Group AG analysts predicted in an October report titled “The Band Stopped Playing.” Morgan Stanley echoed them a few weeks later: “We may be witnessing the sharpest pivot from undersupply to oversupply of light vehicles in a generation.” Five days after that, Bernstein warned of “cracks appearing in global pricing momentum” during 2022’s fourth quarter.