CBB Weekly Automotive Market Update 3/23/2021

March 23 2021

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

Wholesale Prices, Week Ending March 19th

This past week marked another week of continued strengthening in wholesale used vehicle prices in Canada with increases in both the Car and Truck/SUV segments. Yet again, 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 continued to pick up momentum with a stronger up-tick in prices, compared to the previous week, that was much stronger than historical performance (2017-2019), while Truck/SUV segments again outperformed historical weekly price changes (2017-2019), with an increase in prices very similar to the strengthening we saw a week earlier.

Car Segments

• Used cars continued to pick-up momentum this past week, posting a weekly change of +0.30% - an increase compared to the preceding week’s up-tick of +0.15%.
• Another week with most car segments showing a weekly increase, Sub-Compact Cars lead the positive performance with an +0.88% increase, followed by Sporty Cars (+0.86%) and Full-Size Cars (+0.72%).
• Compact Cars (+0.61%), Near Luxury Cars (+0.41%), Luxury Cars (+0.26%), Mid-Size Cars (+0.09%), and Premium Sporty Cars (+0.02%) also had a positive week.
• The Prestige Luxury Car segment (-0.26%) was the only segment that saw weaker prices this past week.

Truck Segments

• Trucks keep on trucking with another strong week, showing a weekly increase in values of +0.55%, following the prior week’s increase of +0.56%.
• Compact Crossovers/SUVs lead the Truck/SUV segments (and the market) with the largest weekly increase at +1.12%, followed by Mid-Size Crossover/SUVs (+1.00%), Sub-Compact Crossovers (+0.75%), and Small Pickups (+0.72%)
• All truck segments had another positive week; however, the Compact Luxury Crossover/SUVs (+0.12%) had the weakest performance for the second week in a row, followed by the Sub-Compact Luxury Crossovers (+0.17%).

Used Retail Prices & Listing Volumes

Average listing prices continued their upward trend last week (14-day moving average, now slightly over $24,860), following the prior week’s increase in prices. The 28-day moving average has also begun to move up, catching up to the daily and 14-day trends, and is now seeing steady increases. This analysis is based on approximately 130,000 vehicles listed for sale on Canadian dealer lots.

We remain optimistic about our expectations for retail prices, as seasonal trends would point to a continued increase in prices as we continue to reap the benefits of the strong market. Although 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, all signs currently point to a continued strong market. 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, which will most likely continue to push used vehicle demand up, and therefore, we expect stronger retail prices in the short term.

Active listing volume remained relatively flat again 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 2020, which dipped to 110,000 units. The general shortage of used product in the market remains relative to demand), even as we continue to see steady volume in the number of vehicles listed for sale as shown in the graph below (right).


Used Retail

Listing volume remained relatively flat again this week, with the CBB Listing Volume Index showing a minimal decline to 1.011 from 1.013 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, relative to demand, will continue to be a key factor in the near-term.


The Canadian wholesale market remained strong this week with Truck, SUV, and Car values all securely in the positive week-over-week territory. The Car segments continued to trend deeper into the positive week-over-week adjustment territory. The Truck and SUVs maintained the same level of week-over-week increase as the previous week. Inventory remains tight while demand continues to grow leading to these gains in value.

Sell rates remain strong as buyers continue to demand inventory and are appearing more willing to adjust to sellers' expectations. This high demand at auctions is expected to continue this week warmer as the weather increases consumer demand, causing dealers to continue to replenish used inventory.

The U.S. market exchange rate remains favourable for exportation; buyers exporting vehicles to the U.S. continues to place pressure on Canadian vehicles as supply is struggling to keep up with overall demand at auctions. The Canadian dollar strengthened this past week; however, this will have little effect on demands with rising prices on both sides of the boarder.

Canadian Black Book’s Market Insights

Economics & Government

• Consumer inflation edged up to 1.1% in February, led by higher prices forgasoline. Gasoline prices rose over 6% from January to February, as stronger global demand pushed year-over-year prices into positive territory for the first time since the start of the pandemic. Headline consumer inflation has averaged 0.5% since COVID 19 began impacting the Canadian economy in March 2020, largely reflecting the impact of lower gas prices on the headline rate. Excluding gasoline, consumer inflation has averaged 1.1% since the start of the pandemic.
• Following a sharp decline at year end, retail sales fell 1.1% in January as lockdown measures weighed on activity in Quebec and Ontario. Lower sales at clothing and clothing accessories stores and at furniture and home furnishing stores contributed to the headline decrease. Sales in Quebec fell 9.8% as retailers faced new restrictions on non-essential businesses and on the sale of non-essential goods. The curfew also reduced operating hours for some essential retailers. Sales in Ontario declined 2.6% after contracting sharply at year end. January's decrease reflected lower sales at clothing and clothing accessories stores.
• The Canadian dollar is now off by over 1% from the 3-year highs it hit earlier last week, primarily due to rising inflation expectations leading to rising bond yields in the US and Canada.

U.S. Market

• All U.S. Car and Truck segments reported another week of increases, with the overall market increasing +1.03%, compared to +1.04% the previous week.
• Car segments had another week of large gains with the overall rate of increase rising to +1.42%, compared to +1.12% the previous week.
o All nine Car segments had gains exceeding +0.50% and five that exceeded +1.00%.
o Premium Sporty Cars had the lowest increase (+0.61%) this past week, but it was still higher than the prior week (+0.52%).
• Truck segments continued to climb (+0.82%), with the rate of increase declining slightly compared to the prior week at +0.99%.
o Full-Size Trucks (+1.04%) had a second week in a row with an increase exceeding +1.00%.
o The mainstream and luxury Sub-Compact Crossover segments both had large levels of increases at +1.78%, exceeding the previous week’s performance. For the mainstream Sub-Compact Crossover segment, this marked the fourth week in a row of weekly gains exceeding +1.00%.

Industry News

• Production issues continue to plague most OEMs. Honda and Toyota both announced new cuts in production last week. This time it was not the global microchip shortage causing the delays but instead “a shortage of petrochemicals” was cited. As for the continued effects of the global microchip shortage, Volvo released a statement regarding the impact on their production and concerns for the situation getting worse in Q2.
• Trucks have seen explosive growth in demand and used pricing in the past year. The 2022 Ford Maverick, a smaller sibling to the Ford Ranger, was spotted on the road undergoing testing in full camouflage. Production is expected to begin this summer in Mexico.
• BMW announced their plans for an electrified future. They are more conservative than some of their competitors with the goal of having half of their sales coming from electric vehicles by 2030.

About Canadian Black Book

For 60 years, Canadian Black Book has been the trusted and unbiased Canadian automotive industry source for vehicle values. Today he 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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