CBB Weekly Automotive Market Update 6/8/2021

June 08 2021
CBB

Wholesale Prices, Week Ending June 4th

The Canadian used vehicle wholesale market continues to rise with an overall +0.32% price increase for the week ending June 4th, 2021, adding to the prior week’s positive performance. The weekly prices increase was seen in both the Car and the Truck/SUV segments, with the Truck/SUVs segment showing another week of strong price development (increasing by +0.48%), which is higher than the prior week’s price increase. Cars had another positive week, but unchanged from last week’s rate (+0.16%). 

Car Segments 

• Used cars posted a positive performance with a weekly change of +0.16%, unchanged compared to the preceding week’s increase of +0.16%.
• A majority of the Car segments showed a weekly increase, with Mid-Size Cars (+0.38%) leading the Car segments.
• Premium Sporty Cars (+0.35%), Sporty Cars (+0.33%), and Full-Size Cars (+0.31%) also had strong performances with above average increases.
• The Compact Car segment (-0.39%) had the weakest performance out of the Car segments, followed by the Near Luxury Car segment (-0.07%), the only two segments showing overall declines.

Truck Segments 

• Trucks posted a positive weekly performance, showing a weekly increase in values of +0.48%, with is a stronger performance than the preceding week’s +0.24%.
• Most Truck/SUV segments saw positive weekly changes, with Full-Size Vans leading all segments with a weekly increase of +1.45%, followed by Compact Vans (+1.15%), and Small Pickups (+0.89%).
• Sub-Compact Luxury Crossovers (-0.63%) continued to lag behind the rest of the Truck/SUV segments, with 4 straight weeks of negative price development.

Monthly Retention Index 

The Canadian Black Book Used Vehicle Retention Index has set yet another new all-time record in May 2021. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, hit 123.6 points, eclipsing the previous record by 2.3 points, which was just last month at 121.3 Index points. This is the eleventh consecutive month of increases and ninth consecutive month with an all-time record high. 

Year-over-year, the Index is up 23% from 100.5 points in May of 2020, which is the largest year-over-year increase in the history of the Index. For May 2021, most segments that Canadian Black Book measures saw increases, with the only exception being the Sub-Compact Car segment   (-1.0% from April 2021). 

Used Retail Prices & Listing Volumes

Used vehicle average listing prices continued their upward trend this past week when looking at both the 14-day moving average (now at ~$26,400) and the 28-day moving average. Analysis is based on approximately 140,000 vehicles listed for sale on Canadian dealer lots.  

Active listing volume had an increase this past week, with the 14-day moving average now at slightly above 139,700. Active listing volume began showing positive movement in early April and we are now seeing a continuation of that trend after a slight step-down last week. 

Volume

Used Retail 

Listing volume saw a large increase this past week, with the CBB Listing Volume Index increasing to 1.104 from 1.081 the prior week. The index continues to show that overall listing volume is at higher levels than this time last year.  

Wholesale 

The Canadian wholesale market strengthened further this week. The increases seen this week were slightly higher than the previous week but lower than ten weeks prior. This continues the trend seen over the last four weeks. Supply remains low with extremely high demand on both sides of the boarder. Upstream channels continue to tap supply before it can be available to wholesale markets. 

Sell rates are still strong this week as buyers continue to demand inventory. Some observed sell rates were as high as 70% this week. 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. We are seeing more sellers setting floors higher than the current market will bear which has been contributing to lower than previous week sell rates. 

The U.S. market exchange rate was similar 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

• The Canadian dollar continued in the $0.83 range the past week. With little movement the last few weeks the momentum of the strengthening Canadian dollar has stalled out for now with some weakness in commodity prices last week.
• Statistics Canada says the economy lost 68,000 jobs in May as mandated lockdowns continued in an effort to slow the spread of COVID-19. Declines in part-time work made up the majority of the overall decline (54,000 jobs). Ontario and Nova Scotia accounted for most of the overall employment decline in May due to lockdowns in those provinces.
• Consumer Confidence in Canada decreased to 48.63 points in May from 52.41 points in April of 2021.
• Canada’s gross domestic product (GDP) grew 1.4% in the first quarter of 2021, up 0.3% from the first quarter of 2020, as pandemic restrictions began to lift in some provinces once the country’s vaccination efforts picked up speed, new Statistics Canada data show.

U.S. Market

All U.S. Car and Truck segments reported increases this past week with the overall market gaining +0.95%, compared to +0.90% last week.

Car segment gains (+0.8%), while above historical trends, were lower when compared to the week prior’s +0.9%.

• All nine car segments reported gains last week, however, 0.8% is the lowest weekly gain in 15-weeks.
• Compact car segment had the largest weekly gain at 1.25%, marking 12-consecutive weeks of greater gains than the overall car segment average.

Similar to Car segments, the Truck segment gains (+1.02%) were slightly below the previous week’s +0.9%.

• Twelve of the thirteen segments reported gains last week, with six gaining 1% or higher.
• For the first time in 15 weeks, the Sub-compact Luxury Crossover segment declined –0.16%.
• Compact Crossover/SUV segment took the lead this week, increasing 1.59%, which is 19-consecutive weeks of gains.

Industry News

• Ford Mach-E production has not exceeded gas powered Mustangs.
• General Motors is expanding its OnStar program - now anyone can download their app from the Apple App Store and Google Play.
• BMW is launching three new EVs, the i4 eDrive40, i4 M50, and iX xDrive50. The i4 M50 will be the first electric M division vehicle.