CBB Weekly Automotive Market Update 04/5/2022

April 05 2022
CBB

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Wholesale Prices, Week Ending April 1st

The Canadian used wholesale market saw overall prices decline slightly for the week (-0.02%). The Car segment saw prices rise slightly (+0.10%), while the Truck/SUV segment saw prices decline (-0.13%) for the week. With gas prices remaining high across Canada, small more fuel-efficient vehicles saw the largest price increases for the week. Sub-Compact Crossover saw the largest price increase for the week (+0.83%), followed by Sub-Compact Car (+0.67%) and Compact Car (+0.63%). Full-Size Car saw the largest price decrease for the week (-0.89%), followed by Full-Size Crossover/SUV (-0.73%).

Car Segments

• Overall, the volume-weighted wholesale used Car prices increased by +0.10% for the week.
• For the 2nd straight week, the Sub-Compact Car segment had the largest price increase (+0.67%), followed by Compact Car (+0.63%) and Sporty Car (+0.59%).
• The Full-Size Car segment saw the largest prices drops for the week, down -0.89% followed by Near Luxury Car (-0.58%) and Mid-Size Car Segment (-0.18%) for the week.

Truck Segments

• Overall, volume-weighted wholesale used Truck/SUV prices decreased by -0.13%.
• The Sub-Compact Crossover segment saw the largest price increase (+0.83%), followed by Minivan (+0.41%) and Full-Size Pickup (+0.35%).
• Full-Size Crossover/SUV segment saw the largest prices declines for the week (-0.73%), followed by Mid-Size Crossover/SUV (-0.51%) and Compact Van (-0.51%).

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index finished at another historical high in March. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 165.0 points, increasing 1.3 points from February. Year-over-year, the Index is up 39.1% from 118.6 points in March of 2021. Full-Size Van segments saw the largest increase for the month, followed by Luxury Car, Prestige Luxury Car and Full-Size Pickups. Full-Size Car and Compact Vans saw the largest decline month-over-month

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 $37,000. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots.

Wholesale

The Canadian wholesale market has continued to remain stable overall but is fell into the negative territory. Newer vehicles tend to be outperforming vehicles aged three years and older.

Supply remains low while demand continues to soften on both sides of the border. Upstream channels continue to tap supply before it can be made available at physical auctions. Conversion rates increased this past week, as rates were observed into the 48% 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.

Canadian Black Book’s Market Insights

Economics & Government

• Real gross domestic product (GDP) grew 0.2% in January, up for the 8th month in a row. Goods-producing industries increased 0.8% in January, while the effects of the Omicron variant continued to impact the service-producing industries.
• The Canadian dollar remains steady at against the USD, finishing the week at $0.80.

U.S. Market

In the U.S., overall, Car and Truck segments (-0.15%) decreased for a fifteenth consecutive week; the prior week decreased by -0.28%.

Volume-weighted Car segments decreased -0.02%, compared to the prior week’s decrease of -0.07%:

• Three of the nine Car segments increased last week. • Sub-Compact Cars (+0.01%) increased for a third consecutive week.
• Compact Cars increased for a second week with a gain of +0.30% after the prior week’s increase of +0.33%.
• Near Luxury (-0.23%) and Luxury Car (-0.22%) had the largest declines last week but were both less than the prior week that declined -0.39% and -0.33%, respectively.

Volume-weighted Truck segments decreased by -0.21%; the previous week had a decrease of -0.39%:

• Eleven out of the thirteen Truck segments reported declines.
• Full-Size Vans continued their upward trend last week with another gain of +0.25%, marking 62 weeks of increases.
• Compact Crossovers went positive last week with an increase of +0.11% after fifteen consecutive weeks of depreciation.
• The Full-Size Luxury Crossover/SUV (-0.81%) segment reported the largest decline last week.
• Despite high fuel costs, Sub-Compact Crossovers continue to decline, fifteen consecutive weeks so far.

Industry News

• The global chip shortage has been wreaking havoc on the supply chain for over a year, and now that shortage is temporarily shutting down a major U.S. automaker. Ford announced that its Flat Rock Assembly Plant near Detroit will be down next week, specifically due to the semiconductor shortage.GM Patents See-Through Windshield Pillars for Better Visibility
• Toyota and General Motors reported a slump in first-quarter U.S. sales on Friday, as industry-wide disruptions to supply chains and chip shortages squeezed inventories.
• The Canadian government has presented its ‘2030 Emissions Reduction Plan’ and included several e-mobility investments. The goal announced last year of bringing forward the phase-out of internal combustion engines by five years to 2035 is confirmed and supplemented by interim targets.