CBB Weekly Automotive Market Update 7/13/2021

July 13 2021
CBB

Wholesale Prices, Week Ending July 9th

The Canadian used vehicle market saw a cautious slowdown in wholesale values this week. Used wholesale values declined -0.41% from the prior week - the price softening was seen in both the Car (-0.33%) and the Truck/SUV (-0.50%) segments. Sub-Compact Cars (-0.81%) saw the biggest wholesale price drop in the Car Segments, followed by Mid-Size Cars (-0.76%) and Near Luxury Cars (-0.74%). Compact Crossover/SUV (-1.35%) values declined the most in the Truck/SUV segment followed by Sub-Compact Crossovers (-0.81%) and Mid-Size Crossover/SUVs (-0.74%). Compact Vans, Small Pickups & Sporty Cars were the only 3 segments to see values increase this week.

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
-0.33% +0.09% -0.25%
Truck
& SUV segments
-0.50% -0.06% -0.29%
Market -0.41% +0.01% -0.27%

Car Segments

• Overall, used car prices remained softened with the weekly prices decreasing by -0.33%, which is down from last week’s price increase of +0.09%.
• Sub-Compact prices declined the most at -0.81% followed by Mid-Size Cars (-0.76%) and Near Luxury Cars (-0.74%).
• Sporty Cars were the only segment to see prices increase for the week (+0.13%).

Truck Segments

• Overall, the Truck segment declined -0.50% for the week, a second consecutive week of prices decreasing (-0.06%).
• Wholesale prices for Compact Crossover/SUV saw the biggest decrease (-1.35%), followed by Sub-Compact Crossovers (-0.81%) and Mid-Size Crossover/SUVs (-0.74%).
• The Compact Van and Small Pickup segment were there only 2 Truck/SUV segments to show a week-over-week price increase with +0.42% and +0.41%, respectfully.

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index has set yet another new all-time record in June 2021. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, hit 125.1 points, eclipsing the previous record by 1.5 points, which was just last month at 123.6 Index points. This is the 12th consecutive month of increases and 10th consecutive month with an all-time record high.

Year-over-year, the Index is up 24.5% from 100.5 points in June of 2020, which is the largest year-over-year increase in the history of the Index. For June 2021, most segments that Canadian Black Book measures saw increases, with the only exception being the Sub-Compact Car segment which remained flat vs. May 2021.

The average listing price continues to hit another historic high for used vehicles as the 14-day moving average surpassed $27,100, up ~$150 from the highs hit last week. Analysis is based on approximately 140,000 vehicles listed for sale on Canadian dealer lots.

Used active listing volume continued to fall as the 14-day moving average has now dropped to approximately 137,800. The positive movement seen in early April now seems to be softening as all provinces begin to reopen.

Volume

Used Retail

Used active listing volume has declined for the 4th straight week, with the CBB Listing Volume Index at 1.072. However, the index continues to show that overall listing volume remains higher than this time last year.

Wholesale

The Canadian wholesale market continues to level off, with the first overall decrease seen in months. Supply remains low with demand slightly cooling on both sides of the boarder. Upstream channels continue to tap supply before it can be available to wholesale markets.

Conversion rates remained inconsistent this week, as some observed sell rates were as high as 83% while others were as low as 33% this week. We are seeing more sellers setting floors higher than the current market will bear, which has been contributing to lower sell rates and values this week. 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 slightly lower compared to the previous week and remains favorable for exportation when price and demand are taken into consideration. Arbitrage opportunities have continued to bring US buyers.

Canadian Black Book’s Market Insights

Economics & Government

• Canadian Economy adds 231,000 job in June as Covid restrictions ease.
• The unemployment rate fell to 7.8% for the month compared with 8.2% in May.
• The Canadian dollar value remains steady in the $0.80 range this past week.

Industry News

• The European Commission has fined Volkswagen Group and BMW $1 billion for colluding with Daimler to hold back the development of technology that could have reduced harmful emissions from their vehicles.
• GM expands its design studio in China to focus on EVs and smart cars. The move comes as GM prepares to cut out petrol and diesel vehicles from its fleet by 2035 and underscores its efforts to gain a bigger foothold in China.
• BMW announced a new all-electric scooter as part of ‘electromobility’ strategy. Released by BMW Motorrad, the company’s motorcycle division, the CE 04 will arrive in Canada early 2022

U.S. Market

In the U.S., overall Car and Truck segments decreased -0.33%. For reference, last week was -0.04%.

The Car segments decline of -0.47% is lower than the week prior’s -0.1
• Sub-compact Cars had the strongest weekly gain at +0.43%.
• The Mid-size Car segment had the steepest decline at -0.81%, followed closely by the Luxury (-0.76%) and Compact (-0.73%) segments.

The Truck segment declined -0.25%, lower than last week’s -0.02%
• Compact and Full-size Van segments had the strongest weekly gains at +0.44% and +0.36%, respectively.
• Small Pickups had the steepest decrease at –1.03%.