CBB Weekly Automotive Market Update 3/16/2021

March 16 2021

“CBB Weekly Automotive Market Update 3/2/2021” is locked CBB Weekly Automotive Market Update 3/2/2021

Wholesale Prices, Week Ending March 12th

Average wholesale used vehicle prices in Canada continued to strengthen this past week with stronger performance from both Car and Truck/SUV segments. This week’s performance was much better than seasonal norms (2017-2019) for the overall market, with Truck/SUV segments again leading the strong market performance. Cars picked up momentum with a strong up-tick in prices that was much stronger than historical performance (2017-2019), while Truck/SUV segments again outperformed historical weekly price changes (2017-2019), and are now seeing a strong up-swing in prices almost identical to last Fall’s strongest weekly performances.

Car Segments

• Used cars continued to strengthen this past week, posting a weekly change of +0.15%; continuing to improve after the preceding week’s up-tick of +0.04%.
• Most car segments showed a weekly increase, with Full-Size Cars leading the positive performance with a +1.21% increase, followed by Sub-Compact Cars (+0.99%) and Compact Cars (+0.38%).
• Sporty Cars (+0.25%), Mid-Size Cars (+0.24%), Premium Sporty Cars (+0.12%), and Near Luxury Cars (+0.11%) also had a positive week.
• The Prestige Luxury Car (-0.20%) and the Luxury Car (-0.13%) segments were the only 2 segments that saw softening in prices this past week.

Truck Segments

• Trucks had another strong week, with an average increase in values of +0.56%, continuing to improve from the prior week’s increase of +0.48%.
• Minivans continued to lead the pack with the largest weekly increase at +1.15%, followed by Compact Crossover/SUVs (+1.08%), Sub-Compact Luxury Crossovers (+0.74%), and Compact Vans (+0.70%).
• All truck segments had a positive week, however, the Compact Luxury Crossover/SUVs (+0.13%) had the weakest performance for the week.

Used Retail Prices & Listing Volumes

Listing prices continued their upward trend last week (14-day moving average, now approaching $24,850), following the prior week’s positive movement in prices. Prior to last week, average listing prices appeared to be softening when looking at the 28-day moving average (now
~$24,800); however, the 28-day moving average is finally catching up to the daily and 14-day trends, and is now seeing increases. This analysis isbased on approximately 130,000 vehicles listed for sale on Canadian dealer lots.

We continue to remain optimistic on our expectations for retail prices, as seasonal trends would point to a continued increase in prices as we head into the Spring market. There is still uncertainty around the impact of current stay-at-home orders and social distance measures, and the degree to which these measures may cool off the Spring selling season. With the removal of stay-at-home orders in Ontario, we expect to see retail demand pick up, with a positive impact on prices. At Canadian Black Book, we continue to monitor the potential impact from the chip shortage on new vehicle inventory, that will most likely continue to push used vehicle demand up, and therefore stronger retail prices in the short term.

Active listing volume remained relatively flat this past week (daily, 14-day and 28-day moving average), still hovering around 130,000 units, which is well above the trough in late August, which dipped to 110,000 units. The general shortage of used product in the market remains, even as we continue to see a steady increase in the number of vehicles listed for sale as shown in the graph below (right).


Used Retail

Listing volume remained relatively flat, with the CBB Listing Volume Index showing a minimal decline to 1.013 from 1.016 the prior week. The index continues to show that overall listing volume is at a higher level compared to this time in 2020, yet significantly below the level in 2019. In the near-term, we continue to expect slower new vehicle sales, driven by the chip shortage, which will reduce the number of trade-ins, further depleting the supply of used inventory. Tight used vehicle inventory levels will continue to be a key factor in the near-term.


The Canadian wholesale market strengthened further this week with Truck and SUV demand pushing values deeper into the positive week-over-week territory. The Car segments continued to trend deeper into the positive week-over-week adjustment territory. The Truck and SUV’s increase outpaced the Car segments by nearly a factor of four when taken as a percentage change of value. Inventory remains tight while demand continues to grow leading to these gains in value.

Through the week we observed strong sell rates as buyers continue to demand inventory and are appearing more willing to adjust to sellers expectations. We observed some very strong sell rates again this week with more strength coming earlier in the week tapering near the end of the week.

The US market exchange rate remains favourable for exportation. Buyers exporting vehicles to the US continue to place pressure on Canadian vehicles as supply is struggling to keep up with overall demand at auctions. With the upcoming stimulus checks as well as tax refunds, we expect the US market to stay strong and continue to look to the Canadian wholesale market for supply. As weather warms up in Canada and Spring is nearer, the wholesale demand will continue to be strong.

Canadian Black Book’s Market Insights

Economics & Government

• The Canadian dollar held at an over 2-week high of 1.25 per USD in mid-March, amid upbeat labour market data. Also, oil prices, one of Canada’s major exports, steadied around $65 per barrel, near an over 2-year high of $67.98 hit in the beginning of the week. This increase in oil is a major factor to the increasing strength of the Canadian dollar.
• Canada’s employment numbers improved with the economy adding 259,000 jobs in February beating the expected increase of 75,000. The volatility of the job market as well as other economic factors is leading to an anticipated move on the bond market that the Bank of
Canada may be making quicker than anticipated. Bond yields currently sit at a 13 month high of 1.552%.
• Bank of Canada held its target for the overnight rate at the effective lower bound of 0.25%, with the Bank Rate at 0.5% and the deposit rate at 0.25%.

U.S. Market

• All U.S. Car and Truck segments reported another week of increases, with the overall market increasing +1.04%, compared to +0.76% the previous week.
• The Car segments had a second week in a row of value gains exceeding 1% (+1.12% last week vs +1.11% the prior week).
o Mainstream segments all reported gains exceeding +1% this past week, with Full-Size Car (+1.57%) being the largest.
o Sporty Cars broke the 1% level again this past week, but the rate of increase (+1.02%) did slow down compared to the +1.78% and +1.89% of the previous two weeks.
• The Truck segments had larger gains this past week at +0.99%, compared to +0.58% the preceding week.
o Eight out of the thirteen truck segments reported gains exceeding 1%, with three of those eight being greater than +1.50%.
o The Sub-Compact Crossover segment had the largest level of truck segment increases for a third week in a row at +1.59%.

Industry News

• Jeep unveiled the all-new Wagoneer and Grand Wagoneer last week with loads of luxury features that on some trim levels will push the MSRP over $100,000 and will add competition to the Cadillac Escalade and Lincoln Navigator.
• General Motors announced the next GMC electric vehicle, a Hummer SUV, will be unveiled on April 3rd. Production is expected to begin in early 2023.
• Kia announced their new nomenclature for their upcoming electrified line-up will be “EV” followed by a number, with the first vehicle being the EV6 crossover.
• GM is idling another plant this week through at least the end of the month as a result of the chip shortage. The Lansing, MI plant is where the Chevrolet Camaro and Cadillac CT4 and CT5 are produced.

About Canadian Black Book

For 60 years, Canadian Black Book has been the trusted and unbiased Canadian automotive industry source for vehicle values. Today the company has grown into a leading data provider of vehicle valuations, residual value forecast solutions and VIN decoding. Canadian Black Book tools and information are considered ‘The Authority’ for vehicle values not only by car dealers and manufacturers, but also the leasing, finance, insurance, and wholesale sectors. In 2021, Canadian Black Book is bringing to market its Enhanced Vehicle Matching (EVM) solution, which will allow the industry to more consistently decode 17-digit VINs down to a specific trim package, allowing a more precise vehicle valuation.

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