04.11.2023

Market Insights – 4/11/2023

Wholesale Prices, Week Ending April 8th

The Canadian used wholesale market saw a slight decline in prices for the week (-0.05). The Car segment remains just ahead of Truck/SUV’s with Car prices decreasing by (-0.03%) while Truck/SUVs’ segment prices declined (-0.052). 9 out of 22 segments’ values have increased for the week. Full-Size Vans lead with (+0.36%) and Full-Size Cars follow behind at (+0.27%). The segments with the largest declines were Compact Luxury Crossovers/SUVs at (-0.50%) and Compact Cars at (-0.46%).

Car Segments

• Overall car segments decreased on average last week by –0.09%.
• There were four segments with a price increase. These were Full-Size Car (+0.27%), Sporty Car (+0.26%), Luxury Car (+0.06%) and Near Luxury Car (+0.03%).
• Four segments had decreases. Compact Car (-0.46%) and Prestige Luxury Car (-0.29%) had the largest.

Truck Segments

• Overall truck segments decreased slightly on average last week by -0.07%.
• Segments with the largest declines were Compact Luxury Crossover/SUV (-0.50%), Compact Crossover/SUV (-0.27%), and Mid-Size Luxury Crossover/SUV (-0.22%).
• Four segments had increases. Full-Size Van (+0.36%), Full-Size Pickup (+0.21%) and Compact Van (+0.20%) had the largest.

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 and the overall decrease was 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. Most segments saw a change in average value of less then $50 this week as the market continues to stabilize.

Conversion rates were quite varied. Some observed sell rates were as low as 12% but most were in the 45-55% 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 unemployment rate in Canada was at 5% for a fourth consecutive month in March of 2023, remaining close to the record-low of 4.9% observed in June and July 2022, and compared to market forecasts of 5.1%.
• The Canadian economy created 35 thousand jobs in March 2023, more than the market expectations of a 12 thousand increase.
• Imports to Canada fell 1.3% to $64.6 billion in February, after increasing 3.6% in January. Meanwhile exports from Canada fell 2.4% to $65 billion in February, with all product sections down except farm, fishing and intermediate food product.
• The Canadian dollar is around $0.741 this Monday morning showing some declines from $0.743 a week prior.

U.S. Market

In the U.S., overall, Car and Truck segments increased +0.43% last week; the prior week increased by +0.51%.

Volume-weighted Car segments increased +0.52%, compared to the prior week’s increase of +0.62%:

• Eight of the nine Car segments increased last week.
• Prestige Luxury Car minimally increased with a gain of +0.0026%, this was the first time this segment has had an increase in values since last June.
• The Sporty Car segment has now been in positive territory for twelve consecutive weeks for an average weekly increase of +0.60%.

Volume-weighted Truck segments increased by +0.39%; the previous week had an increase of +0.46%:

• Twelve of the thirteen Truck segments reported increases last week.
• Compact Van returned into positive territory for the first time since last September with a minimal gain of +0.05%.
• Minivan (+1.12%) was the only segment to report a gain greater than 1% last week.

Industry News

• Q1 sales resulted in 348,000 for 2023, which is 5.2% more than the same period last year, according to Desrosiers Automotive Consultants. This highlights an anticipated slow recovery currently for new car sales that has been labelled as “uneven and unequal” when comparing automakers results.
• The 2023 Toyota Prius Prime is about to launch with its redesigned metal, but more importantly the plug-in Prius now receives upgraded power and a larger battery with improved range now up to 72 kilometers and will start at $37,990, up substantially from the outgoing model.
  · After announcing its electric pick-up truck to join the ranks of other newcomers to the segment, Ram’s 1500 REV pick-up targets up to 800 kilometers of range and 654 hp to combat models from Ford, Rivian, and General Motors.
• Ford Motor Co. plans to share details for the Oakville Assembly Complex as it ends production of internal combustion engines and begins its transition to battery electric vehicles by mid-April; Ford committed to spending $1.8 billion to retool the plant for EVs starting in 2024.
• Genesis has presented its GV80 Coupe concept that is a sloped-roof style GV80 aimed at becoming a more athletic and sportier version of the popular luxury makes’ mid-size crossover.