CBB Weekly Automotive Market Update 9/28/2021

September 28 2021
CBB

Wholesale Prices, Week Ending September 24th

The Canadian used wholesale market continues its positive trend, as all 22 segments had price increases for the week. Lack of inventory continues to be the main driver for these wholesale price increases with both New and Used vehicle inventory continuing to decline. Overall prices increased +0.47% for the week, with Car segments up +0.50% and Truck/SUV segments up +0.45%. Full-Size Crossover/SUVs saw the largest increase (+1.17%) followed by Compact Cars (+1.10%) and Near Luxury Cars (+0.83%).

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.50% +0.67% -0.33%
Truck
& SUV segments
+0.45% +0.31% -0.16%
Market +0.47% +0.49% -0.25%

Car Segments

• Overall, volume-weighted wholesale used car prices increased +0.50% for the week, continuing the positive trend for a 6th straight week.
• The Compact Car segment had the largest price increase for the week (+1.10%) followed by the Near Luxury Car (+0.83%) and Full-Size Car (+0.79%) segments.
• Sporty Cars (+0.03%), Luxury Cars (+0.24%) and Premium Sporty Cars (+0.34%) saw lower than average increases for the week.

Truck Segments

• For the 4th straight week, all 13 Truck/SUV segments saw prices increase or the week.
• Collectively, the Truck/SUV segment was up +0.45% for the week.
• The Full-Size Crossover/SUV segment had the largest price increase for Truck/SUV segments at +1.17%
• Full-Size Luxury Crossover/SUVs and Compact Vans saw modest increases this week at +0.05% and +0.12%, 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 over $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 17,000 for the first time since October 2020, as the 14-day moving average has now sits at ~116,200 units. Days-to-turn remains stable at ~48 days (unchanged from last week).

Volume

Used Retail

The CBB Listing Volume Index continues its decline, as the index currently sits at 0.902, which is the lowest point this calendar year. Over the past 15 weeks, the used vehicle listing volume has significantly declined and now is only slightly higher than this time last year.

 Wholesale

The Canadian wholesale market continues to increase yet again. 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 remained strong this past week. Rates were observed 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

• Justin Trudeau, and the Liberal party re-elected with a minority government.
• Supply could be the bottleneck to recovery as consumption and exports increase.
• The Canadian dollar recovered slightly to the $0.79 range for the week

Industry News

• Ford Motor Co. is investing $50 million in an upstart electric vehicle battery recycling company to bolster its U.S. battery supply chain.
• Mercedes-Benz announced that it will join Stellantis and Total Energies as equal partners in Automotive Cells Company (ACC) to make battery cells for electric cars.
• Volkswagen will reduce production this week at its main plant in Wolfsburg, Germany, as the global shortage of microchips and electronic components continues to affect the automaker.

U.S. Market

In the U.S., overall Car and Truck segments (+0.48%) increased for a fourth week; last week increased by +0.38%.

Volume-weighted Car segments increased +0.57%, compared to the prior week’s increase of +0.43%:

• Eight of the nine Car segments reported gains last week, with Sporty Car (-0.11%) being the only segment to decline. The segment has now reported declines for thirteen consecutive weeks.
• Mid-Size (+0.86%) and Compact (+0.83%) Car segments reported the largest gains, but the Near Luxury (+0.66%) and Luxury (+0.70%) segments weren’t far behind in the rate of gains.

Volume-weighted Truck segments increased +0.43%; the previous week had an increase of +0.36%:

• All thirteen truck segments reported gains last week.
• Full-Size Trucks had a second consecutive week of increases, with the segment increasing +0.03% after the prior week’s increase of +0.10%.
• Minivans (+0.75%) had another large week of gains with the segment increasing for a 7th consecutive week. The segment has reported gains in thirty out of the last thirty-five weeks, for an average weekly change of +0.71%.