05.02.2023

Market Insights – 5/2/2023

Wholesale Prices, Week Ending April 29th

The Canadian used wholesale market saw a decline in prices for the week at -0.04. The Car segment pulled ahead of Truck/SUV’s with Car prices increasing by (+0.02%) while Truck/SUVs’ segment prices declined (-0.09%). 10 out of 22 segments’ values have increased for the week. Compact Vans lead with +1.37% and Full-Size Pickups follow behind at +0.69%. The segments with the largest declines were Compact Luxury Crossovers/SUV (-0.79%) and Sub-Compact Crossover (-0.28%).

Car Segments

• The market’s Car segments saw an increase on average last week by +0.02%.
• There were seven segments with a price increase. Full-Size Car had the largest increase at (+0.35%), followed by Sporty Car (+0.31%) and Sub-Compact Car (+0.23%).
• The two segments with a decrease in pricing were Near Luxury Car at (-0.17%) and Prestige Luxury Cars (-0.14%).

Truck Segments

• Last week overall truck segments decreased on average by -0.09%.
• Segments with the largest declines were Compact Luxury Crossover/SUV (-0.79%), Minivan (-0.31%), Sub-Compact Crossover (-0.28%) and Full-Size Van (-0.27%).
• Three segments had increases. Those were Compact Van (+1.37%), Full-Size Pickup (+0.69%) and Compact Crossover/SUV (+0.07%)

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 170,000 vehicles listed for sale on Canadian dealer lots.

Wholesale

The Canadian market continued to decrease, and the overall decrease was slightly 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. Many segments saw a change in average value of less than $50 this week as the market continues to stabilize.

Conversion rates were quite varied. Some observed sell rates were as high as 65% but most were in the 40-50% 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 Canadian GDP likely edged down by 0.1% month over month in March 2023, as increases in the public sector, professional, scientific & technical services, and administrative & support, waste management & remediation services were partially offset by declines in retail & wholesale trade and mining & quarrying.
• Canada’s government budget surplus widened to CAD 9.5 billion in February 2023, from CAD 5.5 billion in the corresponding month of the previous year. Revenues increased by $1.3 billion, or 3.1%, due largely to an increase in tax revenues.
• Consumer confidence in April rebounded to 49.24 from 47.28 the prior month according to an IPSOS survey.
• The Canadian dollar is around $0.738 this Monday morning showing very little change from $0.739 a week prior.

U.S. Market

In the U.S., overall, Car and Truck segments increased +0.20% last week; the prior week increased by +0.27%.

Volume-weighted Car segments increased +0.27%, compared to the prior week’s increase of +0.37%:

• Six of the nine Car segments increased last week.
• Sporty Car reported the largest increase last week, up +0.81%. This marks the fifteenth consecutive week of increases for the segment with an average weekly gain of +0.64%.
• Prestige Luxury (-0.16%), Near Luxury (-0.08%), and Premium Sporty (-0.06%) Car segments all reported declines.

Volume-weighted Truck segments increased by +0.17%; the previous week had an increase of +0.22%:

• Nine of the thirteen Truck segments reported increases last week.
• Minivan (+0.47%), Small Pickup (+0.43%), and Full-Size Pickup (+0.39%) had the largest Truck segment gains.
• The Compact Luxury Crossovers (-0.03%) declined for a second consecutive week and Sub-Compact Crossovers (-0.06%) declined for the first time since early February.

Industry News

• Stellantis looks to cut jobs in Canada and the U.S. as the global automaker’s CEO, Carlos Tavares looks to recognize savings while ramping up costly EV production as its multiple brands begin to launch a total of 25 new electric models to North America by 2030.
• After a 7-year run, Chevrolet’s Bolt EV will be discontinued after this year, with GM citing a focus on its new generation of EV’s; though this is one of the most affordable EV’s for sale today, the Equinox and Blazer EV’s still to come look to offer high value, lower cost electric SUVs to the market.
• ZEV registrations for Q4 have accounted for nearly 10% of all vehicles sold in the last 3 months of 2022, amounting to 33,399 BEV and PHEV with the split between full-electric and plug-in electric at 83% and 17% respectively.
• General Motors will be removing Apple CarPlay capability from its new electric vehicles as it transitions its development and design of a new interface utilizing Android Automotive to equip vehicles with an in-house solution, as this is known to improve on the collection of vehicle data which can provide deep future revenue streams.
• As material costs rise and overall production levels are still limited, automotive suppliers are taking on the greatest impacts of productions shortages, as high inflation and increased debt levels add pressure to operating costs, possibly consolidating this space as a greater number of suppliers seek creditor protection amidst the threat of bankruptcy.
• The Trillium Automobile Dealers Association (TADA) will not be known as the Motor Vehicle Retailers of Ontario (MVRO) and along with its new title gets a new president; the dealer principal and general manager of Williamson Chrysler, Jim Williamson.