CBB Weekly Automotive Market Update 01/4/2022

January 04 2022
CBB

Wholesale Prices, Week Ending December 31st

The Canadian used wholesale market finished the year on a positive, with prices increasing for the 21st straight week. 16 of the 22 vehicle segments saw prices increase for the week, as declining inventory continues to main driver for the increasing prices. Overall, prices increased +0.32% for the week. The Car segments up +0.52% and Truck/SUV segments up +0.13%. The Compact Van segment saw the largest price increase (+1.49%) for the week, followed by Near Luxury Car (+1.37%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.52% +0.28% -0.32%
Truck
& SUV segments
+0.13% +0.23% -0.39%
Market +0.32% +0.25% -0.35%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.52% for the week, continuing the positive trend for the 20th straight week.
• The Near Luxury Car segment had the largest price increase for the week (+1.37%) followed by Full Size Car (+0.97%) and Mid-Size Car (+0.56%).
• The Sporty Car segment was the only Car segment to see prices decline for the week, down -1.00%.

Truck Segments

• Overall, volume-weighted wholesale used Truck/SUV prices increased +0.13% for the week, continuing the positive trend for the 21st straight week.
• The Compact Van segment saw the largest price increase for the week +1.49%, followed by Full-Size Van (+1.33%).
• Full-Size Pickup segment saw the biggest decrease (-1.08%), followed by Full-Size Crossover/SUV (-0.56%).

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index finished the year at another historical high. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 158.5 points, increasing 5.9 points from November. Year-over-year, the Index is up 42.2% from 111.5 points in December of 2020. Compact Van, Sub-Compact Car, and Full-Size Van segment saw the largest increases, while only Full-Size Pickup segments had an overall decline for the month of December.

Used Retail Prices & Listing Volumes

The average listing price for used vehicles continues to hit historic highs week-over-week, as the 14-day moving average now sits slightly below $32,500. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots.

Wholesale

The Canadian wholesale market continues to increase yet again. This past week, almost all segments reported increasing values.

Supply remains low while demand continues to be strong on both sides of the border. Upstream channels continue to tap supply before it can be available at physical auctions.

Conversion rates remained strong this past week. Rates were observed into the 70% range on some lanes last week, with the few low kilometer, good condition units garnering high levels of bidding activity. In general, the quality of vehicles at auction remains somewhat below average as the supply of better-quality vehicles continues to be bought upstream.

The U.S. market exchange rate is similar compared to the previous week and remains favorable for exportation when price and demand are taken into consideration.

Canadian Black Book’s Market Insights

Economics & Government

• Consumer confidence remained relatively stable (Nano Report)
• Provincial Government introduces new restriction to combat omicron variant.
• The Canadian dollar remains stable, finishing the week at $0.79.

Industry News

• Hyundai, Kia forecast 12% sales increase in 2022 despite chip shortage.
• Ford Will Build Nearly Twice As Many F-150 Electric Trucks Amid Hot Demand
• Toyota Motor Corp outsold General Motors in the United States in 2021, marking the first time the Detroit automaker has not led U.S. auto sales for a full year since 1931.
• Mercedes has unveiled a new all-electric concept car, the EQXX, that the company claims can go 620 miles (1,000 km) on a single charge.

U.S. Market

In the U.S., overall Car and Truck segments (-0.03%) decreased for a second consecutive week; the prior week decreased by -0.03%.

Volume-weighted Car segments decreased -0.10%, compared to the prior week’s decrease of -0.08%:

• Compact Cars decreased for a fifth consecutive week, -0.20% after the prior week’s decline of -0.32%.
• Mid-Size Cars continue to increase. This past week’s increase of +0.04% marks the twentieth week of gains for an average weekly increase of +0.59%.
• The Prestige Luxury Car (+0.18%) segment also reported an increase this past week. By comparison, in the same week in 2019 reported a decline of -0.63%.

Volume-weighted Truck segments increased +0.01%; the previous week had an increase of +0.02%:

• Full-Size Vans reported another week of gains, increasing +0.41%. This now marks the forty-eighth increase in the last forty-nine weeks.
• The other two van segments, Compact and Minivan, also reported increases of +0.28% and +0.49%, respectively.
• The smaller Sub-Compact (-0.14%) and Compact Crossover (-0.31%) segments declined last week. Mid-Size (+0.03%) and Full-Size (+0.11%) Crossover/SUV segments continue to increase.