03.21.2023

Market Insights – 3/21/2023

Wholesale Prices, Week Ending March 18th

The Canadian used wholesale market saw prices decline for the week (-0.20%). The Car segment leads in front of Truck/SUV’s with Car prices declining (-0.15%) while Truck/SUVs’ segment prices declined (-0.25%). 4 of the 22 segments had values increase, with Mid-Size Cars leading at (+0.70%) and Compact Luxury Crossover/SUVs following behind at (+0.07%). The segments with the largest declines were Compact Vans at (-0.70%) and Luxury Cars at (-0.48%).

Car Segments

• Overall car segments decreased on average last week by -0.15%.
• All except two segments had decreases. Those with the largest were Luxury Car (-0.48%), Near Luxury Car (-0.30%) and Sub-Compact Car (-0.28%).
• Two segments had increases. Those segments were Mid-Size Car (+0.70%) and Sporty Car (+0.02%).

Truck Segments

• Overall truck segments decreased on average last week by -0.25%.
• All segments except two had decreases. Those with the greatest declines were Compact Van (-0.70%) and Full-Size Van (-0.45%). Full-Size Crossover/SUV, Mid-Size Luxury Crossover/SUV and Full-Size Pickup all had the same decrease (-0.38%).
• Two segments had increases. Those were Compact Luxury Crossover/SUV (+0.07%) and Sub-Compact Crossover (+0.01%).

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 $36,000. Analysis is based on approximately 180,000 vehicles listed for sale on Canadian dealer lots.

Wholesale

The Canadian market continued to decrease unlike the increases seen across the border over the past week. The overall decrease was similar 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. Less segments saw increases this week as the market continues to stabilize.

Conversion rates were quite varied. Some observed sell rates were as low as 33% but most were in the 40-55% 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

• Consumer Confidence in Canada fell to 47.28 points in March from 47.49 points in February according to an IPSOS pole.
• Over the weekend, the Swiss government engineered a takeover of Credit Suisse by UBS, triggering a write-off of $17 billion worth of AT1 bonds from the former. This has helped stabilize the banking sector including in Canada.
• The Raw Materials Price Index for Canada fell 0.4% in February following a decrease of 0.2% in January.
• The Canadian dollar is around $0.728 this Monday morning and nearly matching $0.725 a week prior.

U.S. Market

In the U.S., overall, Car and Truck segments increased +0.49% last week; the prior week increased by +0.44%.

Volume-weighted Car segments increased +0.63%, compared to the prior week’s increase of +0.46%:

• Seven of the nine Car segments increased last week.
• After the rate of increase for Sporty Cars slowed down two weeks ago, it picked up steam again last week with a gain of +1.17%. The segment has increased for nine consecutive weeks.
• Prestige Luxury Car continues to decline, but it had the lowest single week decline for the segment since July 2022.

Volume-weighted Truck segments increased by +0.43%; the previous week had an increase of +0.43%:

• Eleven of the thirteen Truck segments reported increases last week.
• Compact Crossover had the largest increase last week with a gain of +0.92%. This is the third consecutive week that the segment has had the largest increase of all Truck segments.
• Despite all of the increases, Compact and Full-Size Vans continue to decline.

Industry News

• Volkswagen Group has confirmed St. Thomas, ON, as the site of its new battery cell plant, now that the brand has committed to the largest auto industry investment in Canadian history.
• Kia has announced its newest EV model, the EV9, to the industry as the first electric mainstream 3-row Crossover available to consumers in late 2023.
• The growth of electric vehicles has produced demand for specific EV components such as specific low-rolling resistance tires, to the effect that the Canadian government is giving $44.3 million to Michelin’s manufacturing plants in Nova Scotia.
• Cox Automotive is ending physical auction sales at Manheim Edmonton as it looks to support Western Canada through digital-only auctions in Edmonton and Vancouver.