CBB Weekly Automotive Market Update 9/14/2021

September 14 2021
CBB

Wholesale Prices, Week Ending September 10th

The Canadian used wholesale market continues to gain momentum, as all 22 segments saw prices increase for the week. As inventory continues to decline for both New and Used vehicles, overall prices increased +0.41% week-over-week. Overall wholesale prices in both the Car and Truck/SUV segments saw increases, with Car segments increasing the most (+0.55%), led by the Full-Size Car (+1.12%) segment. Truck/SUV segments saw prices increase +0.28%, led by Mid-Size Crossovers/SUVs (+0.52%), followed closely by Compact Crossover/SUVs (+0.50%).

  This
Week
Last
Week
2017-2019
Average (Same Week)
Car segments +0.55% +0.09% -0.27%
Truck & SUV segments +0.28% +0.32% -0.25%
Market +0.41% +0.21% -0.26%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.55% for the week.
• All 9 Car Segments had price increases for the week.
• Full-Size Cars saw prices increase the most (+1.12%), followed by Sporty Cars (+0.92%) and Prestige Luxury Cars (+0.75%).

Truck Segments

• For the 2nd straight week, all 13 Truck/SUV segments saw prices increase for the week.
• Collectively, the Truck/SUV segment was up +0.28% for the week.
• Mid-Size Crossover/SUVs had the largest price increases -- up +0.52%, followed by Compact Crossover (+0.50%) and Sub-Compact Crossover (+0.42%).

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 $28,700. Analysis is based on approximately 140,000 vehicles listed for sale on Canadian dealer lots.

The number of used active listings fell below 120,000 for the first time since October 2020, as the 14-day moving average has now sits at ~119,200 units. Days-to-turn continues to remain stable at ~47 days.

Volume

Used Retail

The CBB Listing Volume Index continues its steep decline, as the index currently sits at 0.920, which is the lowest point this calendar year. The used vehicle listing volume remains higher than this time last year; however, it is anticipated to continue with its downward trend in the near future.

Wholesale

The Canadian wholesale market continues to increase after weeks of seeing the market soften. This past week, all 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 at physical auctions. 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.

Canadian Black Book’s Market Insights

Economics & Government

• Employment rose by 90,000 (0.5%) in August, the 3rd consecutive monthly increase.
• The unemployment rate fell 0.4 points to 7.1%, which is the lowest rate since the onset of the pandemic.
• The Canadian dollar continues to hold firm around the $0.80 range.
• The Consumer Confidence Index continues to slide and now sits at 61.15, down 8.0 points in the last four weeks. according to Bloomberg-Nanos.

Industry News

• Toyota will slash global production again next month by 330,000 units as the pandemic and global shortage of automotive microchips continue to bite. The total hit represents a 40% cutback from Toyota's original October production plan.
• GM now expects to withhold or cut production on about 200,000 vehicles in North America during the second half of the year, which is double the 100,000 units that was expected when GM reported second-quarter earnings in August.
• Stellantis halts Cherokee and Pacifica production for 2 more weeks. Stellantis has extended shutdowns at assembly plants in the U.S. and Canada due to the chip shortage.

U.S. Market

In the U.S., overall Car and Truck segments (+0.17%) increased for a second week. For reference, last week increased by +0.04%.

Volume-weighted Car segments increased +0.31%, compared to the prior week’s increase of +0.18%:

• Seven of the nine car segments reported gains last week, with Compact Car (+0.90%) having the largest increase, marking the fourth week of increases for the segment.
• Full-Size and Sporty Cars were the only segments to report declines, although they were minimal at -0.03% and -0.05%, respectively.

Volume-weighted Truck segments increased +0.09%; the previous week had a decline of –0.02%

• The Full-Size segments, both SUVs (mainstream at -0.01% and luxury at -0.11%) and Pickups, were the only Truck segments to report declines. The SUV segments were stable, and Pickup segments declined by -0.42%.
• Vans continued to increase, with Minivans (+0.93%) and Compact Vans (+1.12%) reporting the largest increases last week.