06.14.2022

Market Insights – 6/14/2022

Wholesale Prices, Week Ending June 10th

Overall, the Canadian used wholesale market saw prices slightly decline for the week (-0.12%). For the 10th straight week, the Car segment outperformed the SUV/Truck segment, as rising interest rates and high gas prices have consumers looking for smaller, more fuel-efficient vehicles. The Car segment saw prices remained relatively flat (+0.04%), while the Truck/SUV segment saw prices decline by -0.28%, for the week. 6 of 9 Car segments saw prices increase for the week, with Mid-size Car leading the way up 1.21%.

Car Segments

• Overall, the volume-weighted wholesale used Car prices remained relatively flat for the week (+0.04%).
• Mid-Size Car segment saw the largest price increase for the week (+1.21%), followed by Prestige Luxury Car (+0.21%) and Full-Size Car (+0.11%).
• 3 of the 9 Car segments saw prices decline for the week, with Luxury Car segment seeing the largest decline (-0.18%), followed by Near Luxury Car (-0.15%) and Sporty Car (-0.09%).

Truck Segments

• Overall, volume-weighted wholesale used Truck/SUV prices decreased for the 11th straight week (-0.28%).
• Only 2 sub-segments saw prices slightly increase for the week, with Sub-Compact Luxury Crossover up +0.16% followed by Full-Size Van (+0.04%)
• 11 of 13 Truck/SUV segments saw prices decrease for the week, with Compact Van segment decline the furthest (-1.10%) followed by Minivan (-0.71%) and Full-Size Luxury Crossover/SUV (-0.69%).

Used Retail Prices & Listing Volumes

The average listing price for used vehicles continues to decline week over week, as the 14-day moving average drops below $37,000. Analysis is based on approximately 120,000 vehicles listed for sale on Canadian dealer lots.

Wholesale

The Canadian wholesale market has continued to soften overall with decreases in sales prices last week compared to the week prior.
Supply remains low while demand continues to soften on both sides of the border. Upstream channels continue to tap supply before it can be made available at physical auctions. Conversion rates were challenged this past week, as rates were in the 45% range on most lanes last week, with the few low kilometer, good condition units garnering high levels of bidding activity. In general, the quality of vehicles at auction remains somewhat below average as the supply of better-quality vehicles continues to be bought upstream.

Canadian Black Book’s Market Insights

Economics & Government

• Unemployment rate reached new record low, the unemployment rate edged down 0.1 percentage points in May, reaching a new record low of 5.1%.
• Declines in consumer confidence hit lows not seen since 2020. Forward looking views on the value of real estate dropped significantly in the past four weeks, says Bloomberg/Nanos.
• The Canadian dollar fell against the USD, finishing the week at $0.77.

U.S. Market

In the U.S., overall, Car and Truck segments (+0.10%) increased for a seventh consecutive week; the prior week increased by +0.11%.

Volume-weighted Car segments increased +0.26%, compared to the prior week’s increase of +0.21%:

• Seven of the nine Car segments increased last week.
• Compact Cars had another week of gains, with the segment increasing an additional +0.76%. The segment has now increased for twelve consecutive weeks for an average weekly increase of +0.58%.
• Luxury and Premium Sporty were the only Car segments to report declines, -0.20% and -0.16%, respectively.
• Sporty Car had another impressive week, increasing +0.51% after the prior week’s +0.62% value jump.

Volume-weighted Truck segments increased by +0.03%; the previous week had an increase of +0.06%:

• Eight out of the thirteen Truck segments reported increases.
• The Sub-Compact Luxury Crossover segment reported the largest Truck segment increase with a gain of +0.41%. The mainstream Sub-Compact Crossover segment had the second highest gain at +0.28%.
• In sharp contrast, the Full-Size (-0.40%) and Full-Size Luxury (-0.26%) Crossover/SUV segments reported the largest declines.
• The Pickup segments, Small (+0.15%) and Full-Size (+0.14%), are continuing to report gains, despite high fuel prices.

Industry News

• Ferrari to set out route into EV era. The sports carmaker is set to unveil its much-awaited business plan, heading into the new era of cleaner, silent and electric mobility.
• Nissan calls chip shortage ‘New Normal’ amid supply chain issues.
• Shares of Toyota Motor Corp opened down more than 2% on Monday after media reports citing criticism from European pension funds of the automaker for what they said were lobbying efforts that went against climate regulation for the industry.
• The CEOs of General Motors, Ford Motor, Chrysler parent Stellantis and Toyota Motor North America are urging the United States Congress to lift the federal government’s cap on the number of vehicles that are eligible for a tax credit of up to $7,500, a move they say will encourage consumer adoption of the cars and trucks.