11.29.2022

Market Insights – 11/29/2022

Wholesale Prices, Week Ending November 25th

Overall, the Canadian used wholesale market saw prices decline for the week (-0.25%). Both Car and Truck/SUV segments performed similarly to the week before, with Car segment prices declining (-0.16%) and Truck/SUV segment prices declining (-0.33%) last week. Only 2 of the 22 segments had value increases for the week, Prestige Luxury Car at (+0.04%) and Minivan at a flat (+0.00%).

Car Segments

• Overall car segments decreased slightly last week by -0.16%.
• All except one segment had decreases last week. Segments with the largest declines were Mid-Size Car (-1.26%), followed by Near Luxury Car (-0.32%), Sub-Compact Car (-0.19%), Compact Car (-0.11%) and Full-Size Car (-0.08%).
• The only segment with an increase was Prestige Luxury Car (+0.04%).

Truck Segments

• Overall truck segments decreased on average by -0.33% last week.
• All segments decreased. Segments with the largest declines last week were Compact Van (-1.10%), followed by Sub-Compact Luxury Crossover (-1.05%), Small Pickups (-0.94%) and Compact Crossover/SUV (-0.67%).
• A few other segments with notable declines were Mid-Size Crossover/SUV (-0.50%), Full-Size Crossover (-0.44%) and Compact Luxury Crossover (-0.34%).

Used Retail Prices & Listing Volumes

The average listing price for used vehicles decreased slightly week-over-week, as the 14-day moving average was at roughly $36,680. Analysis is based on approximately 200,000 vehicles listed for sale on Canadian dealer lots.

Wholesale

The Canadian wholesale market decreased further last week. The overall decreases were similar to the prior week’s declines and slightly above historical average. Supply remains low with demand for more recent and clean condition vehicles on both sides of the border. Upstream channels continue to tap supply before it can be available to wholesale markets.
Conversion rates were similar to last week. Some observed sell rates were as low as 25% but most were in the 50-60% range. Last week we saw similar levels sellers dropping floors, which has been contributing to lanes with improved sell rates.

Canadian Black Book’s Market Insights

Economics & Government

• The Federal Government recorded a budget deficit of 2.2 billion in September 2022 compared to a deficit of 11.4 billion in September 2021. Revenues increase while Covid related spending from last year decreased.
• Canadian real estate prices have fallen 15.3% to an average of $735,400 in October down from a peak of $868,300 in March.
• The average weekly earnings of non-farm payroll employees in Canada increased by 3.5% on a year-to-year basis to $1,175 in September of 2022. This marks the 16th consecutive month of growth.
• The Canadian dollar remains stable over the last week giving back some gains earlier on in the week.

U.S. Market

In the U.S., overall, Car and Truck segments decreased -0.60% last week; the prior week decreased by -0.89%.

Volume-weighted Car segments decreased -0.57%, compared to the prior week’s decrease of -0.94%:

• All nine Car segments decreased last week.
• Sub-Compact Car (-1.66%) was the only segment that had a decline greater than 1%.
• In stark contrast, the Compact Car segment reported a minimal decline of -0.07%, likely due to the short auction week.
• All other Car segments were consistent with prior weeks, but declines were just less than recent weeks.

Volume-weighted Truck segments decreased by -0.61%; the previous week had a decrease of -0.87%:

• All thirteen Truck segments reported declines last week.
• Minivan (-1.29%) was the only segment to report a decline greater than 1%.
• Full-Size Van, once again, had the smallest decline of all the Truck segments at -0.20%.
• Compact Crossover (-0.62%) had the lowest depreciation for the segment, at -0.62%, since the second week of July when the segment declined -0.43%.

Industry News

• The “Empowering Auto Conference” was held last week to great success as Hyundai Canada hosted 200+ attendees to some of the most influential Canadian automotive leaders, such as our very own SVP & General Manager, Yolanda Biswah to discuss supporting gender and cultural diversity in the Automotive Industry.
• Calgary’s Annual Auto Show has been cancelled amidst increasingly low Auto Manufacturer participation as the show was anticipating a comeback after a 2-year hiatus due to COVID-19; adding to this topic, Ford & Lincoln just announced that they will drop out of all Canadian Auto Shows, eliminating corporate support altogether.
• Imperial Oil and EV charging company, Flo, have partnered to provide more than 2,000 ESSO and Mobil Gas stations with EV chargers across the country with rollout starting with only a few pilot stores as the two companies refine strategies for mass market.
• Rivian arrives in Canada with its first vehicle deliveries in British Columbia (so far only to staff) as the EV manufacturer looks to increase vehicle production and continue delivering vehicles to those customers who first put down deposits for the R1T Pick-up truck and R1S SUV.