CBB Weekly Automotive Market Update 12/7/2021

December 07 2021
Kim Breidenbach

Wholesale Prices, Week Ending December 3rd   

The Canadian used wholesale market continues to be red-hot, as prices have increased for the 17th straight week. Price increases were seen across 19 of the 22 vehicle segments, as declining inventory continues to main driver for the increasing prices. Overall, prices increased +0.74% for the week, slightly up from last week’s increases. The Car segments up +0.34% and Truck/SUV segments up +1.13%. The Sub-Compact Car saw the largest price increase (+2.22%) for the week, followed by Compact Crossover/SUV (+2.06%) and Sub-Compact Crossover (+1.83%). 

  This Week  Last Week  2017-2019 Average (Same Week) 
Car segments  +0.34%  +0.49%  -0.28%  
Truck & SUV segments  +1.13%  +0.71%  -0.35% 
Market  +0.74%  +0.60%  -0.31% 

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.34% for the week, continuing the positive trend for the 15th straight week.

• The Sub-Compact Car segment had the largest price increase for the week (+2.22%) followed by Compact Car (+1.63%) and Full-Size Car (+1.51%).

• Luxury Car (-0.22%), Premium Sporty Car (-0.12%) and Sporty Car (-0.06%) were the only segments to see prices slightly decrease for the week.

Truck Segments

• For the 12th consecutive week, all 13 Truck/SUV segments
saw prices increase. Collectively, the Truck/SUV segments were up +1.13% for
the week.

• The Compact Crossover/SUV segment had the largest price increase for
Truck/SUV segments at +2.06%, followed by Sub-Compact Crossover (+1.83%) and Full-Size
Van (+1.42%).

• Sub-Compact Luxury Crossover (+0.43%), Full-Size Pickup (+0.75%) and Full-Size Crossover/SUV (+0.79%) saw the smallest price increase for the week.

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index finished at another historical high in November. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 152.6 points, increasing 13.2 points from October 2021, the largest one month increase this year. Year-over-year, the Index is up 37.8% from 110.7 points in November of 2020. Compact Car, Sub-Compact Crossover and Mid-Size Car saw the largest increases, only Premium Sporty Car segment saw a decline for the month of November.

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 $31,000. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots.

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 60% 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 favourable for exportation when price and demand are taken into consideration.

Canadian Black Book’s Market Insights

Economics & Government

Unemployment rate fell 0.7 percentage points to 6.0% in November – the sixth consecutive monthly drop and the largest since March 2021. 

•  Real gross domestic product (GDP) rose 1.3% in the 3rd quarter, driven by Consumer spending and exports. 

The Canadian dollar rose slightly to finish the week at $0.79.

U.S. Market

In the U.S., overall Car and Truck segments (+0.41%) increased for a fourteenth week; the prior week increased by +0.18%.

Volume-weighted Car segments increased +0.25%, compared to the prior week’s increase of +0.13%:

• Compact Cars had fifteen weeks of consecutive gains, but this past week they experienced some softening with a decline of -0.15%. However, newer (0-to-2-year-old) Compact Cars increased by +0.11%.

• Mid-Size (+0.34%) Cars continued to report a large increase for a sixteenth consecutive week.   

Volume-weighted Truck segments increased +0.50%; the previous week had an increase of +0.21%:

• Compact Vans (+2.55%) reported a large increase again last week. This segment has now had increases in forty-two out of the last forty-four weeks, for an average weekly increase of +0.74%.  

• Full-Size Vans have now increased for forty-four of the last forty-five weeks, with an average weekly increase of +0.62%. Last week the segment had a gain of +0.82%.

Industry News

Jaguar to hold off any new models until 2025 when EV lineup will continue its rollout

• 2022 Kia EV6 Gets EPA-Rated To Up To 310 Miles Of Range

• BMW unveils high-performance XM hybrid electric concept vehicle ahead of U.S. production

• Nissan boss warns no end in sight to global chip shortage. The Omicron variant could add pressure to a chronic shortage of microchips used in car manufacturing, the boss of car giant Nissan has warned.