CBB Weekly Automotive Market Update 11/02/2021

November 02 2021
CBB

Wholesale Prices, Week Ending October 29th

The Canadian used wholesale market continues to be red-hot, as prices increase for the 12th straight week. 21 of 22 vehicle segments saw prices rise for the week, as lack of inventory continues to drive wholesale prices higher. Overall, prices increased +0.64% for the week, with Car segments up +0.45% and Truck/SUV segments up +0.83%. The Full-Size Van segment had the largest price increase (+1.44%) for the week, followed by Sub-Compact Luxury Crossover (+1.28%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.45% +0.69% -0.42%
Truck
& SUV segments
+0.83% +0.51% -0.31%
Market +0.64% +0.60% -0.37%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.45% for the week, continuing the positive trend for the 12th straight week.
• 8 of 9 car segments had prices increase – with only Full-Size Car seeing prices decline for the week, down -0.70% from last week.
• The Compact Car segment had the largest price increase for the week (+1.12%) followed by the Mid-Size Car (+0.91%), and Sub-Compact Car (+0.64%).

Truck Segments

• For the 9th consecutive week, all 13 Truck/SUV segments saw prices increase. Collectively, the Truck/SUV segments were up +0.83% for the week.
• The Full-Size Van segment had the largest price increase for Truck/SUV segments at +1.44%, followed by Sub-Compact Luxury Crossovers (+1.28%) and Compact Van (+1.23%).
• Full-Size Pickup (+0.36%) had the smallest increase for the week.

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index finished at another historical high in October. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 139.4 points, increasing 6.8 points from September. Year-over-year, the Index is up 26.1% from 110.5 points in October of 2020. Compact Car, Near Luxury Car, and Sporty Car segments saw the largest increases, while no segments had overall declines for the month of October.

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 $30,000. 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 110,000 -- the lowest point in the last 3 years. The 14-day moving average has now sits at ~108,700 units. Days-to-turn remains stable at ~49 days (unchanged from last week).

Volume

Used Retail

The CBB Listing Volume Index for used vehicles remained flat for the week. Currently the index sits at 0.87; dealers continue to deal with depleting inventory levels on both New and Used vehicles. Over the past 19 weeks, the used vehicle listing volume has seen significant declines.

Wholesale

The Canadian wholesale market continues to increase yet again. This past week, nearly 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 and premium pricing. 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

• Building permits rose 4.3% in September, led by Ontario (+6.3%). Construction intentions in the residential sector were up 8.2%, while non-residential sector decreased 3.2%.
• Canadian consumer confidence continues to slide. Of note, the proportion of Canadians who report their finances are better compared to a year ago has hit a 10-month low, say Bloomberg Nano report.
• The Canadian dollar remains stable around the $0.81 to finish the week.

Industry News

• Toyota is investing US$461 million into its first U.S. plant to add new technology, increase production flexibility and reduce its carbon footprint, the company said Friday in a statement.
• Mercedes-Benz To Launch LFP-Powered BEVs from 2024. The more affordable chemistry will be applied in the more price-sensitive segments.
• Stellantis' 4 new EV platforms to each support 2 million cars a year.

U.S. Market

In the U.S., overall Car and Truck segments (+0.66%) increased for a ninth week; the prior week increased by +0.63%.

Volume-weighted Car segments increased +0.67%, compared to the prior week’s increase of +0.87%:

• All nine car segments reported gains again last week.
• Mid-Size Cars (+1.08%) increased for an eleventh week in a row for an average weekly increase of +0.76%. Four of the last five weeks of increases exceeded 1%.
• Sub-Compact Cars increased +0.62%, compared to the same week in 2019, when the segment had a decline of -1.03%.

Volume-weighted Truck segments increased +0.66%; the previous week had an increase of +0.50%:

• All thirteen truck segments reported gains last week.
• Compact Crossovers reported the largest segment increase last week, +1.46%.
• The Compact Crossover segment wasn’t the only one to have an increase greater than 1%, Sub-Compact (+1.13%), Sub-Compact Luxury (+1.32%), and Compact Luxury (+1.03%) also reported large weekly gains.