CBB Weekly Automotive Market Update 4/20/2021

April 20 2021
CBB

Wholesale Prices, Week Ending April 16th

The Canadian used vehicle market experienced another week of strong wholesale price increases.  The Truck/SUV segments continued to lead the market with above average week-over-week price increases, although not as strong as the weekly increases seen in recent weeks.  Cars also had a strong week with a solid up-tick in prices well above historical average increases.

Car Segments

• Used cars posted another positive performance with an above historical average weekly change of +0.37%, which is a slight decrease compared to the preceding week’s increase of +0.39%.
• Most car segments showed a weekly increase, with Mid-Size Cars (+1.09%) again leading the Car segments.
• Sporty Cars (+0.89%), Compact Cars (+0.48%), Premium Sporty Cars (+0.45%), and Full-Size Cars (+0.41%) also had strong performances with above average increases.
• The Prestige Luxury Car segment (-0.17%), the only Car segment with a weekly decline in prices, and the Luxury Car (+0.05%) segment trailed the rest of the car market.

Truck Segments

• Trucks posted a strong weekly performance, showing a weekly increase in values of +0.53%, losing some of the momentum from the prior week’s increase of +0.84%.
• Most Truck/SUV segments saw positive weekly changes, with Full-Size Pickups leading the Truck/SUV segments (and the market) with the largest weekly increase at +1.21%, followed by Small Pickups (+1.04%), Full-Size Vans (+0.83%), Full-Size Crossover/SUVs (+0.80%), Minivans (+0.72%), and Mid-Size Crossover/SUVs (+0.62%).
• Full-Size Luxury Crossover/SUVs (-0.43%), the only Truck/SUV segment with a weekly decline in prices, Compact Luxury Crossover/SUVs (+0.18%), and Sub-Compact Crossovers (+0.23%) had the weakest performances this week on the Truck/SUV side of the market.

Used Retail Prices & Listing Volumes

Used vehicle average listing prices continued strengthening this past week, with the14-day moving average now at $25,200. The 28-day moving average also continued to see increases, mirroring the daily and 14-day trends, which have been experiencing an upswing in prices since late February. Analysis is based on approximately 130,000 vehicles listed for sale on Canadian dealer lots.

Active listing volume is finally showing positive movement this past week, with the 14-day moving average now at around 128,500, up from the prior week’s figure of ~127,100.  Active listing volume actually began to show some positive movement last week when looking at the daily and weekly trends, and we are now seeing the trend continuing.

Volume

 Used Retail

Listing volume saw a solid increase this past week, with the CBB Listing Volume Index increasing to 1.014 from 0.996 the prior week. The index continues to show that overall listing volume is at levels similar to this time last year and following a similar increase week-over-week to what we experienced at the same time last year.

Wholesale

The Canadian wholesale market strengthened further this week with overall Truck/SUV and Car values in positive week-over-week territory. Supply remains low with demand extremely high on both sides of the boarder.  Upstream channels continue to tap supply before it can be available to wholesale markets.

Sell rates remain strong this week as buyers continue to demand inventory. They are willing to adjust to sellers' expectations, especially in the Truck segment. Some observed sell rates were as high as 75% this week - low supply and high demand keeps any saleable vehicle from returning to the auction block a second time. This high demand at auctions is expected to continue this week as the lack of new vehicle supply continues to increase demand for used vehicles.

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

Canadian Black Book’s Market Insights

Economics & Government

• The Consumer Price Index rose 1.0% in January and 0.7% in December on a year-over-year (YOY) basis. The acceleration in consumer prices was largely due to higher prices for durable goods (+1.7%) and rising gasoline prices (+6.1%) compared with December 2020.
• Consumer Confidence in Canada increased just over 4% in April to 52.41 points from 50.25 points in the previous month. Consumer Confidence in Canada is expected to be 51.90 points by the end of this quarter, according to Trading Economics global macro models and analysts' expectations.
• The Canadian dollar held at 0.80 USD in the third week of April with small fluctuations throughout the week. The Canadian Dollar is expected to trade at 0.80 USD by the end of this quarter, according to Trading Economics global macro models and analysts' expectations.
• The increase of COVID-19 cases in Canada has created a cause for concern in Government, particularly in Ontario, which has 47% of the country’s active cases, and in Alberta, which has the highest active cases per capita. This has sparked further restrictions which will impact the economy at large.

U.S. Market

• All U.S. Car and Truck segments reported increases this past week, with the overall market gaining +1.34%, compared to +1.59% the week prior.
• Car segments this past week, continued to have large gains (+1.60%), but the rate of increase slowed compared to the week prior (+1.79%).
o Eight of the nine Car segments had another week of gains exceeding +1.00%, with Compact Cars (+2.30%) exceeding 2% for a third week in a row.
o Prestige Luxury Cars (+0.72%) was the only segment to have gains below 1.00%. In comparison, this segment had a decline of -0.29% during the same week in 2019.
• Truck segment gains continued this past week (+1.48%), but it was at a lower level compared to the previous record-setting week (+1.73%).
o All thirteen truck segments reported gains with seven exceeding 1.00%.
o Sub-Compact Crossovers (+2.14%) had a fourth week in a row of increases exceeding 2%.
o Full-Size Trucks continue to see values pushing higher with another +1.75% increase this past week, compared to +1.57% the week prior.

Industry News

• Supply chain shortages continue to plague the OEMs. Not only is there a shortage of microchips and seat foam, but now OEMs need to worry about the supply of rubber for tires. Ford announced additional planned downtime for their top selling F150 full-size pickup production. Honda, Volkswagen, and Nissan also had recent announcements of plant disruptions due to the ongoing supply issues.
• This past week, Hyundai’s all-new Santa Cruz sport adventure vehicle, Mercedes-Benz's all-electric EQS sedan, and Audi’s latest all-electric Q4 e-tron crossover were all unveiled.
• Ford announced a hands-free driving assistance system “BlueCruise,” which will be a subscription-based autopilot option costing $750 for 3 years - this cost is in addition to the initial option cost for a vehicle to come equipped with the technology.

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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