CBB Weekly Automotive Market Update 7/7/2021

July 07 2021
CBB

Wholesale Prices, Week Ending July 2nd

Used vehicle wholesale prices remain firm with an overall increase of +0.01%, while the used retail market in Canada remains red-hot. Premium Sporty car & Prestige Luxury car (+0.30%) saw the largest price increase for the car segment. Overall, the Cars segment held at +0.09% vs last week’s +0.04%. Additionally, Truck/SUV segments remained relatively flat (-0.06%) vs prior week’s +0.06%. The Minivan segment saw the largest increase (+0.40%) and Sub-Compact Luxury Crossover saw the largest decline (-0.47%) in the wholesale channel last week.

  This Week Last Week 2017-2019
Average (Same Week)
Car
segments
+0.09% +0.04% -0.12%
Truck
& SUV segments
-0.06% +0.06% -0.08%
Market +0.01% +0.05% -0.10%

Car Segment

• Overall, used car prices remained relatively flat with a weekly change of +0.09%, which is slightly higher than last week’s increase of +0.04%.
• Premium Sporty Car & Prestige Luxury Car segments saw weekly prices increase by +0.30% followed by Luxury Car and Near Luxury Car segments at +0.18%.
• Wholesale prices for Mid-Size Cars fell by -0.59% followed by Sub-Compact Cars and Compact Cars, which were down -0.42%.

Truck Segments

• Overall, Truck segment weekly values remain relatively flat for another week (-0.06%), reversing the small increase of +0.06% seen last week.
• Minivan prices increased +0.40% for the week, followed by Small Pickups (+0.35%) and Compact Vans (+0.26%).
• Sub-Compact Luxury Crossovers have the largest price decline (-0.47%) for the 2nd straight week, followed by Sub-Compact Crossovers (-0.29%) and Mid-Size Luxury Crossover/SUVs (-0.24%).

Used Retail Prices & Listing Volumes

The average listing price continues to hit historic highs for used vehicles as the 14-day moving average now sits just under $27,000, up $200 from the highs hit last week. Analysis is based on approximately 140,000 vehicles listed for sale on Canadian dealer lots.

Used active listing volume continued to fall as the 14-day moving average has now dropped to ~139,000. The positive movement seen in early April now seems to be softening as all provinces begin to reopen.

Volume

Used Retail

For the 3rd straight week, listing volume has declined vs. prior week, with the CBB Listing Volume Index at 1.083. However, the index continues to show that overall listing volume is at higher levels than this time last year.

Wholesale

The Canadian wholesale market continues to level off, with only a minimal increase this week. Supply remains low with high demand on both sides of the boarder. Upstream channels continue to tap supply before it can be available to wholesale markets.

Conversion rates were remained inconsistent this week, as some observed sell rates were as high as 79% while others were as low as 29% this week. We are seeing more sellers setting floors higher than the current market will bear, which has been contributing to lower sell rates. 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 was similar to the previous week and remains favorable for exportation when price and demand are taken into consideration. Arbitrage opportunities have continued to bring US buyers, causing a steady flow of vehicles south across the border.

Canadian Black Book’s Market Insights

Economics & Government

• A recent Bank of Canada survey concluded that positive business sentiment is broadening as vaccination rates increase. According to the survey, consumers plan to spend some of the savings accumulated during the pandemic.
• Consumers expect that inflation will stay within or just above the Bank’s inflation-control (1-3%), consistent with medium-term inflation expectations remaining well anchored.
• The Canadian dollar value continues to remain steady in the $0.81 range this past week.

Industry News

• Jaguar is looking for a new platform for their future EV lineup after cancelling plans for an all-electric remake of their XJ sedan.
• In coming months, Bugatti is expected to transition as part of a joint venture with Croatian electric-car maker Rimac and Porsche. General Motors, Ford Motor Co., and Stellantis announced that they will end mask mandate for fully vaccinated workers at their U.S. factories beginning July 12.
• Self-driving startup, Zoox Inc., who is owned by Amazon, recently released a safety report with details about nine proprietary safety features not found in conventional vehicles including rider protection in the vehicle.

U.S. Market

The U.S. Car and Truck segments overall decreased -0.04%, the first decline since mid-January. For reference, last week was +0.35%.

The Car segments decline of -0.1% is lower than the week prior’s +0.17%

• The Sub-compact Car segment had the strongest weekly gain at +0.7%.
• The Compact Car segment had the steepest decrease at -0.49%.

The Truck segment gains were +0.44%, lower than last week’s +0.68%

• The Full-size Van segment had the strongest weekly gain at +0.92%.
• The Small Pickup segment had the steepest decrease at –0.48%.