CBB Weekly Automotive Market Update 9/21/2021

September 21 2021
CBB

Wholesale Prices, Week Ending September 17th

The Canadian used wholesale market continues its positive trend, as 21 of 22 segments saw prices increase for the week. Lack of inventory continues to be the main driver for these wholesale price increases, as both New and Used vehicle inventory continues to decline. Overall prices increased +0.49% for the week, with Car segments up +0.67% and Truck/SUV segments up +0.31%. Near luxury Cars saw the largest increase (+1.65%) followed by Sporty Cars (+1.43%) and Sub-Compact Luxury Crossovers (+0.97%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.67% +0.55% -0.25%
Truck
& SUV segments
+0.31% +0.28% -0.26%
Market +0.49% +0.41% -0.25%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.67% for the week, the largest increase seen in the past 2 years.
• The Near Luxury Car segment saw the largest price increase for the week (+1.65%) followed by the Sporty Car segment (+1.43%).
• Prestige Luxury Cars were the only segment in both the Car and Truck/SUV segments to see prices fall week-over-week (-0.13%).

Truck Segments

• For the 3rd week in a row, all 13 Truck/SUV segments saw prices increase for the week. Collectively, the Truck/SUV segment was up +0.31% for the week.
• The Sub-Compact Luxury Crossover segment had the largest price increase for Truck/SUV segments at +0.97%, followed by the Small Pickup segment (+0.66%).
• Minivan and Full-Size Crossover/SUVs saw the smallest increases this week at +0.05% and +0.07% respectively.

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 $29,000. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots. The number of used active listings continues to fall and now sits below 118,000 for the first time since October 2020, as the 14-day moving average has now sits at ~117,800 units. Days-to-turn continues rose slightly to ~48 days (up from 47 days, last week)

Volume

Used Retail

The CBB Listing Volume Index continues its decline, as the index currently sits at 0.910, 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 while demand continues to be strong 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 slightly lower 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

• The Consumer Price Index rose 4.1% on a year-over-year basis for August 2021.
• Year-over-year, gasoline prices rose 32.5% in August, mainly driven by lower production from oil-producing countries compared to pre-pandemic levels.
• The Canadian dollar fell slightly to the $0.77 range for the week.

Industry News

• IHS Markit reduced their production forecast for 2021 by 6.2% or 5.02M vehicles and lowered their projection for 2022 by 9.3%, or 8.45M vehicles. "This is the largest single adjustment to the outlook in what has been a turbulent past nine months," the company said Thursday.
• Toyota unveils new 2022 Tundra pickup truck with new hybrid engine and a turbo V6.
• GM plans to idle factories longer amid chip shortage. Auto maker will add scheduled downtime at 7 plants in the U.S., Canada and Mexico.

U.S. Market

In the U.S., overall Car and Truck segments (+0.38%) increased for a fourth week. For reference, last week increased by +0.17%.

Volume-weighted Car segments increased +0.43%, compared to the prior week’s increase of +0.31%:

• Six of the nine car segments reported gains last week, with Mid-Size Car (+0.81%) having the largest increase.
• Sporty Car (-0.47%), Premium Sporty Car (-0.07%), and Prestige Luxury Car (-0.02%) were the only Car segments to report declines.
• Compact Car has now increased for five consecutive weeks, with an average weekly rate of gain of +0.43%.

Volume-weighted Truck segments increased +0.36%; the previous week had an increase of +0.09%:

• Sub-Compact (+0.92%) and Compact (+0.75%) Crossovers reported the largest gains.
• Only one segment experienced declines, the Full-Size Luxury Crossover/SUVs dropped by -0.10%.
• Full-Size Vans are a standout segment -- 33 of the last 34 weeks reported increases with an average weekly change of +0.54%.