CBB Weekly Automotive Market Update 9/08/2021

September 08 2021
CBB

Wholesale Prices, Week Ending September 3rd

The Canadian used wholesale market saw prices continue to rise, increasing +0.21% for the week, as both new and used inventory continue to decline. Overall wholesale prices in both the Car and Truck/SUV segments saw increases, with Truck/SUV segments increasing the most (+0.32%), led by Full-Size Crossovers/SUVs (+0.59%). The Car segments had modest price increases (+0.09%) for the week, with the Mid-Size Car segment leading the way (+0.55%), followed closely by the Sub-Compact Car segment (+0.52%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.09% +0.19% -0.24%
Truck
& SUV segments
+0.32% +0.14% -0.24%
Market +0.21% +0.16% -0.24%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.09% for the week.
• Mid-Size Cars had the largest increase (+0.55%) followed by Sub-Compact Cars (+0.52%) and Compact Cars (+0.44%).
• Prestige Luxury Cars (-0.37%), and Sporty Cars (-0.16%) were the only segments to see prices decline for the week.

Truck Segments

• ll 13 Truck/SUV segments saw prices increase for the week. Collectively, the Truck/SUV segment was up +0.32% for the week.
• Full-Size Crossover/SUVs had the largest price increases -- up +0.59%, followed by Full-Size Vans (+0.51%), and Compact Vans (+0.45%).
• Sub-Compact Luxury Crossovers saw the smallest increase in price (+0.06%) followed by Sub-Compact Crossovers (+0.10%) for the week.

Monthly Retention Index

The Canadian Black Book Used Vehicle Retention Index finished at another historical high in August. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 127.8 points, increasing 3.1 points from July 2021. Year-over-year, the Index is up 19.0% from 107.4 points in August of 2020. Compact Van, Mid-Size Car and Minivan segments saw the largest increases, while no segments had overall declines for the month of August.

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 $28,500. 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 sits under 122,000 vehicles. Days-to-turn remains stable at 47 days.

Volume

Used Retail

The CBB Listing Volume Index continues its downwards trend, as the index currently sits at 0.945, which is the lowest point this calendar year. Used vehicle listing volume currently remains higher than this time last year.

Wholesale

The Canadian wholesale market continued to increase for the fourth 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 border. 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 merchandise imports rose 4.2% and exports increased 0.6% in July, as Canada trade surplus narrows to $788 mil.
• The Canadian dollar continues to hold firm around the $0.80 range.
• The Consumer Confidence Index continues to slide, according to Bloomberg-Nanos.

Industry News

• Mercedes, VW, and BMW warn that chip shortage could last until 2023 - Auto industry needs 10% more production capacity for chips, VW exec says. Volkswagen Group CEO Herbert Diess said shortages will continue for the next months or even years because semiconductors are in high demand. BMW CEO Oliver Zipse said he expects supply chains to remain tight well into 2022. "I expect that the general tightness of the supply chains will continue in the next six to 12 months," he said.
• Toyota to spend nearly $14B on batteries, including solid state, by 2030. Automaker expects to slash the cost of batteries by half in the second half of this decade
• Ram tops J.D. Power initial quality rankings for first time. Dodge ranked second, followed by Lexus and Mitsubishi in a tie for third.

U.S. Market

In the U.S., overall Car and Truck segments (-0.07%) increased after nine weeks of declines. For reference, last week declined by -0.07%.

Volume-weighted Car segments increased +0.18%, compared to the prior week’s increase of +0.06%

• Five of the nine car segments reported gains last week, with Mid-Size Cars (+0.60%) increasing by the largest amount.
• Compact Cars (+0.12%) increased for the third week in a row for an average weekly increase of (+0.17%).
• Near Luxury Cars had nine weeks of declines but moved back into positive territory last week, with an increase of +0.12%.

Volume-weighted Truck segments declined -0.02%, less than the previous week’s decline of –0.14%

• The largest volume segments, Full-Size Trucks (-0.51%) and Mid-Size Crossovers (-0.13%) experienced declines this past week, which led to the overall Truck segment reporting minimal declines.
• Full-Size Vans increased +1.25%, compared to the prior week’s increase of +0.83%. The segment has now had 31 of the last 32 weeks reporting increases for an average weekly increase of +0.55%.