02.28.2023

Market Insights – 2/28/2023

Wholesale Prices, Week Ending February 18th

The Canadian used wholesale market saw prices decline for the week (-0.14%). The Car segment pulls in front of Truck/SUV’s with Car prices declining (-0.03%) and Truck/SUV segment prices declining (-0.24%). 6 of the 22 segments had values increase for the week. Compact Van took the lead with an increase of (+1.49%) and Full-Size Cars followed behind with an increase of (+0.83%). The segments with the largest declines were Full-Size Vans at (-0.75%) and both Full-Size Luxury Crossover/SUV & Sub-Compact Car at (-0.37%)

Car Segments

• Last week, overall car segments decreased on average by -0.03%.
• Five segments had decreases. Those with the largest were Sub-Compact Car (-0.37%), Luxury Car (-0.29%), and Near Luxury Car (-0.13%).
• Four segments had increases. The two with the largest were Full-Size Car (+0.83%) and Mid-Size Car (+0.69%).

Truck Segments

• Last week, overall truck segments decreased on average by -0.24%.
• Segments with the largest declines were Full-Size Vans (-0.75%), Full-Size Luxury Crossover/SUV (-0.37%) and Mid-Size Luxury Crossover/SUV (-0.34%).
• Two segments had increases. Those were Compact Van (+1.49%) and Sub-Compact Luxury Crossover (+0.67%).

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 less 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. Some segments saw increases this week and the market as a whole showed strength of a spring selling season.
Conversion rates were quite varied. Some observed sell rates were as high as 65% but most were in the 30-45% range. Last week we saw some sellers dropping floors, which has been contributing to lanes with higher sell rates.

Canadian Black Book’s Market Insights

Economics & Government

• New home prices in Canada were down 0.2% month over month in January 2023 after holding steady the prior month.
• Food increased 10.4% in Canada year over year in January 2023. This was greater than the 10.1% the prior month and the highest since 1980.
• Canadian 10-year government bond yields rose past the 3.35% mark in February.
• The Canadian dollar is around $0.736 this Monday morning after falling from peak of $0.743 a week ago.

U.S. Market

In the U.S., overall, Car and Truck segments increased +0.21% last week; the prior week increased by +0.14%.

Volume-weighted Car segments increased +0.27%, compared to the prior week’s increase of +0.19%:

• Six of the nine Car segments increased last week.
• Compact Car (+0.60%) reported the largest Car segment increase last week, marking it the third consecutive week of gains. This is the largest single week increase for the segment since June 2022.
• The expensive, luxury segments were the only ones to report declines: Prestige Luxury (-0.39%), Premium Sporty (-0.14%), and Luxury (-0.09%).

Volume-weighted Truck segments increased by +0.18%; the previous week had an increase of +0.11%:

• Eleven of the thirteen Truck segments reported increases last week.
• After thirty-six weeks of declines, Full-Size Pickup (+0.04%) went positive last week.
• Compact Crossover had the largest increase last week, at +0.44%. The segment previously had twenty-two weeks of declines for an average weekly decline of -0.57%.

Industry News

• Ontario’s Premier, Doug Ford said while attending the 2023 Canadian International Auto Show last week that he was “dead against” the federal ZEV sales mandate requiring automakers to sell 100% ZEV’s by 2035; this sentiment has been echoed by industry leaders like Larry Hutchinson, CEO of Toyota Canada and Jean Marc Leclerc, CEO of Honda Canada as the market identifies severe affordability issues and obstacles to mass EV adoption.
• Light-duty vehicle production increased for the first time in 5 years in Canada, says Desrosiers Automotive Consultants, totaling 1.24 million units as 2022 increased 12% versus last year.
• Genesis has now released its 3rd EV to the market, the Electrified GV70 joins the GV60 and G80 Electrified models as the brand continues to introduce compelling electric products to the luxury market in Canada.
• BrightDrop, the GM produced commercial EV brand has announced its 1st official Canadian Dealership through Roy Foss Automotive Group in the Greater Toronto Area.