CBB Weekly Automotive Market Update 8/24/2021

August 24 2021
CBB

Wholesale Prices, Week Ending August 20th

The Canadian used wholesale market rose slightly this week, as both new and used vehicle inventory continues to decline. Wholesale values in both the Car and Truck/SUV segments increased. Truck/SUV prices increased +0.21% for the week, while the Car segment saw a modest +0.05% price increase for the same time-period. Minivans had the largest price increase (+0.66%) in the Truck/SUV segment, while Full-Size Cars saw the largest price increase (+1.28%) in the Car segment.

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.05% -0.07% -0.26%
Truck
& SUV segments
+0.21% +0.11% -0.22%
Market +0.13% +0.02% -0.24%

Car Segments

• Overall, volume-weighted wholesale used car prices saw modest price increases for the week (+0.05%).
• Full-Size Cars had the largest increase (+1.28%) followed by Mid-Size Cars (+0.68%) and Sporty Cars (+0.41%).
• Luxury car segments were the only segments to see prices decline, as Luxury Car, Prestige Luxury Car and Near Luxury Car saw wholesale prices decline between -0.33% and -0.19%.

Truck Segments

• 11 of 13 Truck/SUV segments had increased values for the week. In aggregate, the Truck/SUV segment was up +0.21% for the week.
• Minivans saw the largest price increases for the week (+0.66%), followed by Full-Size Vans (+0.50%), Small Pickups (+0.46%) and Compact Vans (+0.45%).
• Full-size Crossover/SUVs and Sub-Compact Luxury Crossover/SUVs were the only 2 segments with declining values for the week.

Used Retail Prices & Listing Volumes

The average listing price for used vehicles continues to hit historic highs week-over-week, as the 14-day moving average now sits just under $28,000. Analysis is based on approximately 140,000 vehicles listed for sale on Canadian dealer lots. The number of used active listings continues to decline, as the 14-day moving average has now hit its lowest level since mid-April. Used active listings now sit under 127,000 vehicles. Days-to-turn has continued declining and is now at 47 days (vs. 49 days last week), as the positive movement in early April now seems to be softening.

Volume

Used Retail

CBB Listing Volume Index continues its downwards trend, as the index currently sits at 0.986, which is the lowest point this calendar year. Used vehicle listing volume still remains significantly higher than this time last year.

Wholesale

The Canadian wholesale market is back to increases after five weeks of overall market declines and one week of stability. This past week, most segments reported increasing values. Supply remains low with demand slightly picking up on both sides of the boarder. Upstream channels continue to tap supply before it can be available to wholesale markets. Conversion rates improved this past week after a few weeks of inconsistent sales. Rates soared into the 80% range on some lanes last week, with the few low kilometer, good condition units garnering high levels of bidding activity. In general, 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 similar 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

• Retail sales were up 4.2% to $56.2 billion in June, mainly due to easing of restrictions on non-essential retail.
• The Canadian dollar value is continuing to hold firm around the $0.80 range.
• CPI rose 3.7% on a year-over -year basis in July, up from a 3.1% gain in June.

Industry News

• Up until now, Toyota has been unaffected by the microchip shortage, but they announced last week they will be making cuts to production because of the shortage. They are estimating this will cut their September global volume by approximately 40%.
• Ford also made headlines last week, with more planned plant closures, this time for the F-150.
• General Motors has had production disruptions to most of their product line-up and the list of affected models continues to grow. The latest to fall victim to the microchip shortage are the Chevrolet Bolt EV and EUV. Additional downtime is also planned this week for some of their SUVs and sedans.
• Volkswagen is collaborating with Electrify Canada to supply three years of free charging for 2021 ID.4 owners.

U.S. Market

In the U.S., overall Car and Truck segments (-0.36%) decreased for the eighth week in a row. For reference, last week was -0.52%.

Volume-weighted Car segments declined -0.12%, lower than last week’s decline of -0.58%:
• Sub-Compact Car (-0.74%), Prestige Luxury Car (-0.55%), and Sporty Car (-0.90%) segments had the largest declines this past week. Sub-Compact Cars had twenty-five weeks of gains, so it is no surprise that the past three weeks have had large declines. For comparison, the prior weeks’ change was -0.91%.
• Six of the nine car segments reported stability with only small increases or decreases in wholesale values.
Volume-weighted Truck segments declined -0.48%, same as the previous week:
• All three van segments had gains again last week, with Minivan increasing +0.72%, Full-Size Van up +0.50%, and Compact Van moving by a smaller +0.18%.
• Full-Size Pickups have seen increasing rates of depreciation in recent weeks, with the 1500 series trucks driving the declines due to new vehicle incentives still being available. 2500 and 3500 trucks remain in short supply, with lower incentives.