12.28.2022

Market Insights – 12/28/2022

Wholesale Prices, Week Ending December 24th

Overall, the Canadian used wholesale market saw prices decline once again for the week (-0.44%). Both Car and Truck/SUV segments performed similarly, with Car segment prices declining (-0.48%) and Truck/SUV segment prices declining (-0.40%) last week. 1 of the 22 segments had values increase for the week which was Full-Size Crossover/SUV (+0.16%), followed by Compact Car at (-0.02%).

Car Segments

• Last week, overall car segments decreased on average by -0.48%.
• All segments had decreases. Those with the largest declines were Mid-Size Car (-1.63%), followed by Full-Size Car (-1.56%), Luxury Car (-0.51%) and Premium Sporty Car (-0.50%).
• Other segments with notable declines were Near Luxury Car (-0.47%) and Sporty Car (-0.39%).

Truck Segments

• Last week, overall truck segments decreased on average by -0.40%.
• Segments with the largest declines were Sub-Compact Luxury Crossover (-1.53%), both Compact Van and Small Pickup had the same decrease (-0.80%), followed by Compact Luxury Crossover/SUV (-0.55%), Mid-Size Crossover/SUV (-0.53%) and Sub-Compact Crossover (-0.50%).
• One segment had an increase. That segment was Full-Size Crossover/SUV (+0.16%).

Used Retail Prices & Listing Volumes

The average listing price for used vehicles was consistent week-over-week, as the 14-day moving average was at roughly $36,450. 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 larger than the 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 high as 57% but most were in the 20-35% range. Last week we saw less sellers dropping floors, which has been contributing to lanes with lower sell rates.

Canadian Black Book’s Market Insights

Economics & Government

• The inflation rate in Canada fell to 6.8% in November from 6.9% in October. This slight easing was less than the market expectation of 6.7% and signal future Bank of Canada rate increases to come.
• GDP increased 0.1% in October which was less than the 0.2% increase seen in September. Advanced information indicate that we will see a 0.1% increase in November as well.
• In regards to a recession in 2023, Prime Minister Justin Trudeau said, “Global recession fears, slowing down in the global economy, interest rates continuing to be high, inflation lingering-its going to be though.”
• The Canadian dollar increased slightly closing at $0.738 this Monday.

U.S. Market

In the U.S., overall, Car and Truck segments decreased –0.69% last week; the prior week decreased by -0.82%.

Volume-weighted Car segments decreased -0.74%, compared to the prior week’s decrease of -0.83%:

• All nine Car segments decreased last week, with two of the nine reporting declines greater than 1% (Compact, -1.16%; Sub-Compact, -1.01%).
• Sporty Car depreciation slowed last week, declining only -0.42%, which was the lowest single week decline since mid-July of this year. The segment has now averaged a weekly decline of -0.86% over the past eight weeks.
• Mid-Size Car (-0.54%) depreciation also slowed to the lowest single week decrease since the first week of August (-0.43%).
  Volume-weighted Truck segments decreased by -0.67%; the previous week had a decrease of -0.81%:
• All thirteen Truck segments reported declines last week, with only one of those reporting a decline of over 1%. The Minivan segment declined -1.12%. The segment has an average weekly decline of -1.21% over the last ten weeks.
• The Full-Size Luxury Crossover/SUV segment dramatically slowed the rate of depreciation last week, reporting -0.16% compared with the prior week’s -0.76%.

Industry News

• Toronto Parking Authority owns and operates 60,000 parking spaces, and at present houses zero EV charging stations associated to them. But there are 11 sites opening construction in the GTA that will provide 100 completed charging stations by the end of this year, in hopes of supporting further E adoption.
• Project Arrow, the initiative produced by the Automotive Parts Manufacturer’s Association has begun to slowly unveil the project vehicle that was developed to showcase Canadian talent in the EV space through a tightly guarded and low-key event through Pfaff Autoworks in Markham, ON.
• Toyota brings it’s next generation Prius to market, now developing the car to be even more efficient and attractive to consumers as the longest standing hybrid-electric vehicle to be sold in North America.
• Ontario Industry Minister says 2023 auto investment could exceed success from 2022 as Ontario now focuses on a 2nd EV Battery plant which will provide extraction of Lithium and Nickel to support the global industry help attract new companies to the province.
• Canadian Black Book’s own Senior Automotive Analyst, Daniel Ross, was part of the 2022 “In the Driver’s Seat” segment produced by Automotive News Canada highlighting specific industry leading market research data that is part of Canadian Black Book’s success in Canada.