02.15.2023

Market Insights – 2/15/2023

Wholesale Prices, Week Ending February 4th

The Canadian used wholesale market saw prices decline once again for the week (-0.42%). The Car segment pulls in front of the Truck/SUVs with Car prices declining (-0.31%) and Truck/SUV segment prices declining (-0.52%). All 22 segments had values decrease for the week. The segments with the largest declines were Full-Size Crossovers/SUV (-0.81%) and Sub-Compact Crossover (-0.70%).

Car Segments

• Last week, overall car segments decreased on average by -0.31%.
• All segments had decreases. Those with the largest declines were Premium Sporty Car (-0.43%), Sub-Compact Car (-0.38%), Mid-Size Car (-0.36%) and Compact Car (-0.34%).
• Near Luxury Car and Luxury Car depreciated the same amount (-0.32%).

Truck Segments

• Last week, overall truck segments decreased on average by -0.52%.
• Segments with the largest declines were Full-Size Crossover/SUV (-0.81%), Sub-Compact Crossover (-0.70%) and Full-Size Luxury Crossover/SUV (-0.68%).
• Compact Crossover/SUV and Minivans depreciated the same amount (-0.58%).

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 $36,500. 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 slightly larger than the historical average. Supply remains low with high 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 quite varied. Some observed sell rates were as high as 68% but most were in the 40-50% range. Last week we saw more sellers dropping floors, which has been contributing to lanes with higher sell rates.

Canadian Black Book’s Market Insights

Economics & Government

• Canada’s average hourly earnings for permanent employees has increased by 4.5% year over year in January 2023 which is down from 4.7% the prior month.
• The unemployment rate in Canada has held constant at 5% in January. The rate remained the same even though 150 thousand jobs were added.
• In December Canada reported a trade deficit of 160 million dollars in December 2022
• The Canadian dollar is around $0.750 this Monday morning after falling from peak of $0.742 on Friday.

U.S. Market

In the U.S., overall, Car and Truck segments increased +0.03% last week; the prior week decreased by -0.25%.

Volume-weighted Car segments increased +0.00%, compared to the prior week’s decrease of -0.30%:

• Four of the nine Car segments increased last week. The market has not seen this level of increases since mid-June 2022.
• Sporty Car has been on the upswing for the last four weeks, but last week the segment significantly increased the rate of appreciation, +0.61% compared with the prior 3 weeks that averaged +0.12%.
• Sub-Compact Car was the only mainstream Car segment to report a decline last week, but in contrast the 0-to-2-year-old units in this segment did increase +0.02%.

Volume-weighted Truck segments increased by +0.04%; the previous week had a decrease of -0.23%:

• Five of the thirteen Truck segments reported increases last week.
• Small Pickup (+0.53%) and Compact Crossover (+0.34%) reported the largest increases last week. This was the first week of increases for the Small Pickup segment since June 2022.
• Sub-Compact (-0.11%) and Sub-Compact Luxury (-0.44%) Crossovers declined for the 2-to-8-year-old models, but their newer variants increased, +0.11% and +0.02%, respectively.

Industry News

• Toyota has released the Grand Highlander, a new 3-row SUV to slot above the current Highlander that emphasizes 3rd row passenger space and becomes the flagship SUV in the brands lineup.
• Natural Resources Canada has approved the installation of 2,000 electric vehicle chargers as the Federal Government invests $14.9 million into 32 charging initiatives for the infrastructure of the Greater Toronto Area.
• Honda Canada CEO, Jean Marc Leclerc shared his opinion on Canada’s zero-emission vehicle mandate at the inaugural EV Innovation & Technology conference in Toronto on February 8th; he was quoted saying, “If customer psychological barriers are not urgently addressed — affordability, range anxiety [and] charging infrastructure — mass adoption will not be possible.” This comes at the time when Honda has been considered an industry “laggard” in EV alternatives.
• FLO has announced the introduction of the FLO Ultra charger, an ultra-fast Level 3 charger that will be able to charge EV’s up to 320kW or up to 500kW if multiple chargers are connected.