12.06.2022

Market Insights – 12/6/2022

Wholesale Prices, Week Ending December 3rd

Overall, the Canadian used wholesale market saw prices decline significantly for the week (-0.58%). Both Car and Truck/SUV segments performed similarly, with Car segment prices declining (-0.67%) and Truck/SUV segment prices declining (-0.51%) last week. All the 22 segments had value decrease for the week, Sporty Car leading at (-1.85%) followed by Full-Size Van at (-1.55%).

Car Segments

• Overall car segments decreased last week by -0.67%.
• All segments had decreases last week. Those with the largest declines were Sporty Car (-1.85%), followed by Full-Size Car (-1.36%) and Luxury Car (-0.98%).
• A few other segments with notable declines were Mid-Size Car (-0.68%), Near Luxury Car (-0.61%) and Premium Sporty Car (-0.45%).

Truck Segments

• Overall truck segments decreased on average by -0.51% last week.
• Segments with the largest declines last week were Full-Size Van (-1.55%), followed by Sub-Compact Luxury Crossover (-1.05%), Compact Van (-0.80%).
• A few other segments with notable declines were Full-Size Pickup (-0.79%) and Compact Luxury Crossover (-0.41%).

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 $36,700. 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 more than double the prior week’s declines and nearly double 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 low as 25% but most were in the 40-50% range. Last week we saw more sellers dropping floors, which has been contributing to lanes with improved sell rates.

Canadian Black Book’s Market Insights

Economics & Government

• The Canadian labour market remains tight moving into the last month of the year. The unemployment rate was 5.1% in November which was 0.1% lower than the previous month.
• The Bank of Canada is expected to announce another rate hike on December 7th. Money markets are forecasting a 25 bps increase as inflation still remains an issue.
• Canadas residential building permits fell by 4.6%. This marks the fifth consecutive monthly decline.
• The Canadian dollar decreased this Monday to $0.735, a fall of $0.01. This change was mostly from US bond yield increase on strong US economic news.

U.S. Market

In the U.S., overall, Car and Truck segments decreased -0.72% last week; the prior week decreased by -0.60%.

Volume-weighted Car segments decreased -0.87%, compared to the prior week’s decrease of -0.57%:

• All nine Car segments decreased last week, with three of the nine reporting declines greater than 1% (Sub-Compact Car, -1.09%; Full-Size Car, -1.08%; Mid-Size Car, -1.02%).
• The Premium Sporty Car segment has reported the smallest declines each of the past eight weeks and last week was no different with a decline of -0.46%.
• Sub-Compact Car has been slower to report declines, but the rate of declines has accelerated over the last six weeks, with the segment now averaging a fall of -1.62% per week (compared with the prior six weeks that averaged -0.60%).

Volume-weighted Truck segments decreased by -0.65%; the previous week had a decrease of -0.61%:

• All thirteen Truck segments reported declines last week, but none reported a decline over 1%. This is only the second time in the last sixteen weeks that Truck segment declines remained under 1%.
• Sub-Compact Crossover reported the largest decline last week, at -0.89%. The segment has averaged -1.32% per week over the last six weeks.
• In contrast, the Full-Size Van segment has averaged a weekly decline of -0.15% over the last six weeks.

Industry News

• Calgary based Parkland Corp. has received financial support from the Federal and B.C. governments to produce ultra-fast charge points along its network of existing Chevron & On the Run stores to support EV charging along highways and major destinations in parts of B.C. and in Alberta; effectively doubling the charging network in the area.
• The site search in Canada is on for Volkswagen Group and PowerCo as they search for their first gigafactory site in North America after signing a memorandum of understanding with partner and materials firm Umicore in a long-term strategic plan towards future cell production in the Country.
• BMW Group is developing its 6th generation EV battery cell anticipating 30% greater range by utilizing a cell-to-pack design allowing for more cells to be squeezed into the same battery footprint while reducing costs by 50%.
• Desrosiers Automotive Consultants reported that new light-vehicle sales in November increased 4.1% compared to last year, a positive note in an overall negatively anticipated sales year amounting to only 1.38 million units to date in 2022; a doubtful sign that sales will eclipse the 1.5 million unit mark in Canada.