CBB Weekly Automotive Market Update 10/13/2021

October 13 2021
CBB

Wholesale Prices, Week Ending October 8th

The Canadian used wholesale market continues to be red-hot, as prices increase for the 9th straight week. All vehicle segments saw prices rise for the week, as 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 +0.69% for the week, with Car segments up +0.84% and Truck/SUV segments up +0.59%. Full-Size Cars had the largest increase (+2.26%) followed by Mid-Size Cars (+1.30%) and Near Luxury Cars (+1.20%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.84% +0.66% -0.19%
Truck
& SUV segments
+0.53% +0.49% -0.20%
Market +0.69% +0.57% -0.19%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.84% for the week, continuing the positive trend for the 8th straight week.
The Full-Size Car segment had the largest price increase for the week (+2.26%) followed by the Mid-Size Car (+1.30%) and Near Luxury Car (+1.20%) segments.
• The Premium Sporty Car (+0.41%) and Luxury Cars (+0.52%) segments saw prices increase the least week-over-week.

Truck Segments

• For the 6th straight week, all 13 Truck/SUV segments saw prices increase for the week. Collectively, the Truck/SUV segment was up +0.53% for the week.
• The Compact Crossover/SUV segment had the largest price increase for Truck/SUV segments at +0.85%, followed by Sub-Compact Luxury Crossovers (+0.82%) and Sub-Compact Crossovers (+0.75%).
• Full-Size Pickups (+0.33%) and Mid-Compact Luxury Crossover/SUVs (+0.37%) saw the smallest increases for the week.

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 above $29,250. 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 ~115,000 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. 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 seen significant declines.

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 85% 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

• The unemployment rate declined for the fourth consecutive month in September, falling 0.2 percentage points to 6.9%, the lowest rate since the onset of the pandemic.
• A majority of Canadians either feel uncomfortable or somewhat uncomfortable with the Bank of Canada allowing inflation to increase beyond its 2% target, says Bloomberg-Nanos.
• The Canadian dollar remains stable in the $0.80 range for the week.

Industry News

• North American auto plants have added just 4,000 vehicles to their tally of microchip-related production cuts.
• GM advised that LG is to pay $1.9 billion of $2 billion in costs for Bolt recall. The automaker in August expanded the recall, which will replace LG battery modules due to fire risk, to more than 140,000 cars.
• Canada is now on track to produce only about 1.2 million vehicles this year, down from 1.4 million last year and well off the 2.2 million yearly average for the decade up until 2019, according to a Scotiabank Economics report.

U.S. Market

In the U.S., overall Car and Truck segments (+0.57%) increased for a sixth week; the prior week increased by +0.53%.

Volume-weighted Car segments increased +0.65%, compared to the prior week’s increase of +0.64%:

• All nine car segments reported gains last week. This is the first time this has happened since the week of 6/14/21.
• Compact Car (+1.11%) and Mid-Size (+0.91%) Car segments had the largest gains. For comparison, these segments increased by +0.95% and +1.04%, respectively, last week.
• Sporty (+0.24%) and Premium Sporty (+0.28%) Cars have had some recent weeks of declining values, but both reported increases this past week.

Volume-weighted Truck segments increased +0.52%; the previous week had an increase of +0.47%:

• All thirteen truck segments reported gains last week.
• Compact Van (+1.24%) is a small segment, but it has seen considerable strength throughout the pandemic. Over the last thirty-four weeks, the segment has averaged a weekly increase of +0.69%.
• Compact (+0.95%) and Sub-Compact (+0.81%) Crossovers also had large gains, with Sub-Compact increasing significantly from the prior week’s change of +0.47%. Compact Crossovers were consistent with the prior week’s increase of +0.95%.