CBB Weekly Automotive Market Update 8/31/2021

August 31 2021
CBB

Wholesale Prices, Week Ending August 27th

The Canadian used wholesale market saw prices rise for the 3rd straight week, as OEMs continue to deal with low inventory levels for both new and used vehicles, caused by the global semiconductor shortage. Wholesale values in both the Car and Truck/SUV segments increased. Truck/SUV prices increased +0.14% for the week, while the Car segment led the way with prices increasing +0.19% for the week. Near Luxury Cars had the largest price increase (+0.63%) in the Car segment, while Minivans saw the largest price increase (+0.55%) in the Truck/SUV segment.

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.19% +0.05% -0.22%
Truck
& SUV segments
+0.14% +0.21% -0.25%
Market +0.16% +0.13% -0.23%

 Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.19% for the week.
• Near Luxury Cars had the largest increase (+0.63%) followed by Prestige Luxury Cars (+0.41%) and Sub-Compact Cars (+0.28%).
• Sporty Cars(-0.14%) Premium Sporty Cars (-0.05%) and Full-Size Cars (-0.05%) were the only segments to see prices decline.

Truck Segments

• 12 of 13 Truck/SUV segments saw prices increase for the week. Collectively, the Truck/SUV segment was up +0.14% for the week.
• For the 2nd straight week, Minivans saw the largest price increases -- up +0.55%, followed by Compact Vans (+0.42%), and Compact Luxury Crossover/SUVs (+0.37%).
• Sub-Compact Crossovers were the only Truck/SUV segment with declining values for the week (-0.25%)

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 over $28,200. 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 November 2020. Used active listings now sit under 125,000 vehicles. Days-to-turn remains at 47 days, 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 0.964, 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 continued to increase for the third straight week 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 the 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

• Canadian confidence index fell 1.6 points, the biggest weekly decline since April 2020 according to Bloomberg-Nanos.
• The Canadian dollar value is continuing to hold firm around the $0.80 range.
• Federal election enters its 3rd week of campaigning.

Industry News

• Honda is the latest manufacturer to announce cuts to production. Honda sent letters to their dealers last week letting them know how new vehicle deliveries would be affected, with a warning that production cuts could be by as much as 40%.
• Ford announced more plant closures and reduced shifts at three of their North American facilities, two of which produce their top-selling F-150 pickup. Ford Edge and Lincoln Nautilus are also impacted by this announcement.
• In an effort to keep production going, OEMs have been altering their build combinations. Ram is the latest to make this decision with their 2022 Ram 1500. The truck will lose the Quad Cab option on all but two base trims, as well as some changes to the availability of options such as air ride suspension and the multifunction tail-gate on select trims.

U.S. Market

In the U.S., overall Car and Truck segments (-0.07%) decreased for the ninth week in a row. For reference, last week was -0.36%.

Volume-weighted Car segments increased +0.06%, compared to the prior week’s decline of -0.12%

• Compact (+0.22%) and Mid-Size (+0.29%) Car segments had the largest gains last week, increasing their appreciation compared to the prior week’s changes of +0.17% and +0.07%, respectively.
• The Sub-Compact Car segment declined for the fourth week in a row, but the rate of decline did lessen this past week (-0.32%) compared to the week prior (-0.74%).

Volume-weighted Truck segments declined -0.14%, less than the previous week’s decline of –0.48%

• Compact (+1.26%) and Full-Size (+0.83%) Vans increased again this past week. Full-Size Vans have increased thirty out of the last thirty-one weeks.
• Full-Size Trucks continue to decline, but the rate of decline is slowing down. This past week, they fell -0.74% compared to the previous week’s decline of -1.48%.