CBB Weekly Automotive Market Update 11/09/2021

November 09 2021
CBB

Wholesale Prices, Week Ending November 5th

For the 13th straight week, the Canadian used wholesale market saw prices increase. 21 of 22 vehicle segments saw prices rise, as dealers continue to struggle to find both new and used inventory to fill their lots. Overall, prices increased +0.70% for the week, with Car segments up +0.42% and Truck/SUV segments up +0.98%. For the 2nd week in a row, the Full-Size Van segment saw the largest price increase (+2.68%) for the week, followed by Minivans (+2.19%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.42% +0.45% -0.28%
Truck
& SUV segments
+0.98% +0.83% -0.30%
Market +0.70% +0.64% -0.29%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.42% for the week, continuing the positive trend for the 13th straight week.
• 8 of 9 car segments had prices increase – with only Prestige Luxury Car seeing prices decline for the week, down -0.17% from last week.
• The Compact Car segment had the largest price increase for the week (+1.54%) followed by the Mid-Size Car segment (+1.48%), and the Sub-Compact Car segment (+1.33%).

Truck Segments

• For the 10th consecutive week, all 13 Truck/SUV segments saw prices increase. Collectively, the Truck/SUV segments were up +0.98% for the week.
• The Full-Size Van segment had the largest price increase for Truck/SUV segments at +2.68%, followed by the Minivan segment (+2.19%) and the Compact Crossover/SUV segment (+1.37%).
• Full-Size Crossover/SUVs (+0.26%) and Full-Size Pickups (+0.33%) 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 $30,500. 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 106,000 -- the lowest point in the last 3 years. The 14-day moving average has now sits at ~105,800 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 0.79; dealers continue to deal with depleting inventory levels on both New and Used vehicles. Over the past 20 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 75% range on some lanes last week, with the few low kilometer, good condition units garnering high levels of bidding activity and premium pricing. Many sellers are still choosing to set their floor pricing at higher levels and are willing to re-run a vehicle in the pursuit of a higher price. 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 fifth consecutive month in September, falling 0.2 percentage points to 6.7%, the lowest rate since the onset of the pandemic.
• The Canadian economy is weaker than expected as supply chain woes weigh.
• The Canadian dollar remains stable around the $0.80 to finish the week.

Industry News

• BMW removes touchscreen functionality from some new cars due to chip shortage.
• Honda lowers vehicle sales and profit forecast due to chip shortage. Honda Motor Co. recorded a 31% drop in its fiscal second quarter profit, to 166.6 billion yen ($1.5 billion) from 240.9 billion yen last year. Quarterly sales slipped 7% to 3.4 trillion yen ($30 billion).
• Magna International Inc. reported that their third-quarter profit fell when compared with a year ago, and they cut their outlook for the full year, as auto production around the world fell due to the shortage of semiconductor chips.

U.S. Market

In the U.S., overall Car and Truck segments (+0.65%) increased for a tenth week; the prior week increased by +0.66%.

Volume-weighted Car segments increased +0.83%, compared to the prior week’s increase of +0.67%:

• All nine car segments reported gains again last week.
• Compact Cars (+1.45%) increased for the twelfth week in a row for an average weekly increase of +0.75%. Three of the last five weeks of increases exceeded 1% for Compact Cars.
• Mid-Size Cars (+0.95%) also increased for the twelfth week in a row, but at a slower rate than the week prior (+1.08%).

Volume-weighted Truck segments increased +0.65%; the previous week had an increase of +0.66%:

• All thirteen truck segments reported gains last week.
• Compact (+1.03%), Sub-Compact Luxury (+1.10%), and Compact Luxury (+1.15%) Crossovers all reported gains exceeding 1%.
• Full-Size Vans (+1.02%) also reported a gain exceeding 1%. The segment has now had increases for forty out of the last forty-one weeks.