CBB Weekly Automotive Market Update 10/05/2021

October 05 2021
CBB

Wholesale Prices, Week Ending October 1st

For the 8th consecutive week, the Canadian used wholesale market continues its upward trend, as all but one segment had price increases for the week. Lack of inventory continues to be the main driver for these wholesale price increases with both New and Used vehicle inventory continuing to decline. Overall prices increased +0.57% for the week, with Car segments up +0.66% and Truck/SUV segments up +0.49%. Premium Sporty Car saw the largest increase (+1.02%) followed by Sub-Compact Luxury Crossover (+0.93%). The only segment to see prices decline was Luxury Car (-0.05%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.66% +0.50% -0.25%
Truck
& SUV segments
+0.49% +0.45% -0.19%
Market +0.57% +0.47% -0.22%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.66% for the week, continuing the positive trend for a 7th straight week.
• The Premium Sporty car segment had the largest price increase for the week (+1.02%) followed by the Near Luxury Car (+0.89%) and Sporty Car (+0.87%) segments.
• Luxury Cars was the only segment to see prices decline for the week(-0.05%).

Truck Segments

• For the 5th straight week, all 13 Truck/SUV segments saw prices increase for the week. Collectively, the Truck/SUV segment was up +0.49% for the week.
• The Sub-Compact Luxury Crossover segment had the largest price increase for Truck/SUV segments at +0.93%, followed by Full-Size Crossover/SUV (+0.79%), Compact Crossover/SUV (+0.78%) and Sub-Compact Crossover (+0.77%).
• Small Pickup (+0.13%) and Full-Size Van (+0.18%) saw the smallest increases for the week.

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index finished at another historical high in September. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 132.6 points, increasing 4.8 points from August 2021, the largest one month increase this year. Year-over-year, the Index is up 27.1% from 109.0 points in September of 2020. Full Size Car, Near Luxury Car and Sporty Car segments saw the largest increases, while no segments had overall declines for the month of September.

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 just under $29,200. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots. The number of used active listings continues to fall and now sits below 116,000 for the first time since September 2020, as the 14-day moving average has now sits at ~115,900 units. Days-to-turn remains stable at ~48 days (unchanged from last week).

Volume

Used Retail

The CBB Listing Volume Index for used vehicles continues its decline, and for the first time since week 16 the index sits below its 2020 value. The index currently sits at 0.89, as dealers and OEMs dealer with depleting inventory levels for both New and Used vehicles. Over the past 16 weeks, the used vehicle listing volume has significantly declined and is not expected to improve in the near future.

Wholesale

The Canadian wholesale market continues to increase yet again. This past week, 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 80% 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

• Tourism spending in Canada increased 4.2% in the second quarter, following a 2.5% decrease in the first quarter.
• GDP edged down 0.1% in July following a 0.6% increase in June. Total economic activity in July was ~2% below the pre-pandemic level of February 2020.
• The Canadian dollar remains stable in the $0.79 range for the week.

Industry News

• Honda will use Google’s embedded Android Automotive in its cars starting in 2022
• Jeep revealed the 2022 Grand Cherokee two-row model, and it adds a new 4xe plug-in hybrid that promises 57 MPGe and up to 6000 pounds of towing capabilities.
• Volvo announces plans to go public in bid to accelerate shift to electric cars. The Swedish automaker has said it would be an EV-only company by 2030.

U.S. Market

In the U.S., overall Car and Truck segments (+0.53%) increased for a fifth week; last week increased by +0.48%.

Volume-weighted Car segments increased +0.64%, compared to the prior week’s increase of +0.57%:

• Eight of the nine Car segments reported gains last week, with Premium Sporty Car being the only segment to decline by a minimal -0.01%.
• Again, this past week, Mid-Size (+1.04%) and Compact (+0.95%) Car segments reported the largest gains, increasing by a larger amount than the prior week’s already large +0.86% and +0.83%, respectively.

Volume-weighted Truck segments increased +0.47%; the previous week had an increase of +0.43%:

• All thirteen truck segments reported gains last week.
• Full-Size Trucks had a third consecutive week of increases, with the segment increasing +0.20% after the prior week’s increase of +0.03%.
• Full-Size Vans (+1.26%) have now increased for thirty-five out of the last thirty-six weeks for an average weekly gain of 0.55%. The microchip shortage has forced OEMs to prioritize full-size truck and SUV production over this highly demanded segment, causing competition for these vehicles to continuously increase.