CBB Weekly Automotive Market Update 7/20/2021

July 20 2021
CBB

Wholesale Prices, Week Ending July 16th

The Canadian used wholesale market prices stabilized this week. Overall, used wholesale values declined -0.09% from the prior week, less than half of the weekly decline (0.21%) during this same period in normal years. Wholesale values in the Car segment dropped by -0.19%, while the Truck/SUV segments remained flat. Premium Sporty Cars (+0.48%) saw the biggest wholesale price increase in the Car Segments, followed by Prestige Luxury Cars at +0.32%. Full-Size Van values increased +0.52%, leading the way in the Truck/SUV segment followed by Minivan with +0.34%.

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
-0.19% -0.33% -0.23%
Truck
& SUV segments
0.00% -0.50% -0.19%
Market -0.09% -0.41% -0.21%

Car Segments

• Overall, used car prices softened slightly (-0.19%), the first back-to-back weekly price declines since February.
• Premium Sporty Cars (+0.48%) and Prestige Luxury Cars (+0.32%) were the only two segments to have prices increase from last week.
• Sporty Cars saw the biggest drop in wholesale prices (-1.20%), followed by Full-Size Cars (-0.97%) and Near Luxury Cars (-0.50%) for the week.

Truck Segments

• Overall, the Truck segment remained flat for the week, as prices stabilized after 2 consecutive weeks of declining values.
• Prices for Full-Size Vans saw the biggest increase this week (+0.52%), followed by Minivans (+0.34%) & Compact Vans (+0.28%).
• Mid-Size Crossover/SUV saw the biggest decrease (-0.31%), followed by Sub-Compact Crossovers (-0.20%) and Compact Luxury Crossover/SUVs (-0.11%).

Used Retail Prices & Listing Volumes

The average listing price for used vehicles continued its upward trend again this week, as the 14-day moving average surpassed $27,250, up ~$150 from last week’s historical high. Analysis is based on approximately 140,000 vehicles listed for sale on Canadian dealer lots.

Used active listing volume steadied for the week, 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

CBB Listing Volume Index remained relatively flat for the week at 1.073. However, the index continues to show that overall listing volume remains significantly higher than this time last year.

Wholesale

The Canadian wholesale market continues to cool off, with the second decrease in a row. 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 80% while others were as low as 5% 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. Some U.S. buyers may be hesitant due to cooling markets and the time lag between purchasing a vehicle in Canada and selling it in the U.S.

Canadian Black Book’s Market Insights

Economics & Government

• The Bank of Canada expects GDP growth of around 6% in 2021 a little slower than was expected in April.
• Bank of Canada has revised its 2022 forecast to 4.5% and projects 3.25% growth in 2023.
• Consumption is expected to lead the recovery as households return to more normal spending patterns, while housing market activity is projected to ease back, says Bank of Canada.
• The Canadian dollar value has dipped below the $0.80 range, to $0.79 this past week.

Industry News

• Ford announced cancellation of the F-150 diesel option because of low demand.
• EU plans to phase out internal-combustion cars by 2035. The proposed plan would effectively end sales of gas- and diesel-engine models, as well as hybrids. Not surprisingly, there is opposition.
• EV truck-marker Rivian pushed back launch of first pickup to September - the Amazon-backed manufacturer says production of its debut model, the R1T, is suffering supply-chain issues.

U.S. Market

In the U.S., overall Car and Truck segments decreased -0.62%. For reference, last week was -0.33%.

The Car segments decline of -1.03% is lower than the week prior’s -0.47%

• Sub-compact Cars had the largest weekly gain at +0.19%.
• The Compact Car segment had the steepest decline at -1.9%, followed by Mid-size Cars (-1.19%) and Luxury Cars (-1.14%).

The Truck segment declined -0.41%, lower than last week’s -0.25%

• The Compact Van segment had the strongest weekly gain at +0.56%.
• Small Pickups had the steepest decrease at -0.87%.