06.21.2022

Market Insights – 6/21/2022

Wholesale Prices, Week Ending June 17th

Overall, the Canadian used wholesale market saw prices decline for the week (-0.22%). The Car segment continues to outperform the SUV/Truck segment, as consumers opt for smaller, more fuel-efficient vehicles, as gas prices remain high across Canada. The Car segment saw prices decline (-0.15%), while the Truck/SUV segment saw prices decline by -0.29%, for the week. 7 of 22 segments saw prices increase for the week, with Full-size Car and Luxury Car leading the way +0.26%.

Car Segments

• Overall, the volume-weighted wholesale used Car prices declined (-0.15%) for the week.
• Full-Size Car and Luxury Car segments saw the largest price increases for the week (+0.26%), followed by Prestige Luxury Car (+0.11%) and Premium Sporty Car (+0.02%).
• Near Luxury Car segment saw the largest price decline for the week (-0.75%), followed by Mid-Size Car (-0.50%) and Compact Car (-0.40%).

Truck Segments

• Overall, volume-weighted wholesale used Truck/SUV prices decreased for the 12th straight week (-0.29%).
• Only 3 sub-segments saw prices modest price increases for the week, with Sub-Compact Luxury Crossover up +0.04% followed by Sub-Compact Luxury Crossover and Full-Size Truck (+0.03%)
• 10 of 13 Truck/SUV segments saw prices decrease for the week, with Compact Van segment decline the furthest (-0.51%) followed by Full-Size Luxury Crossover/SUV (-0.49%) and Mid-Size Luxury Crossover/SUV (-0.48%).

Used Retail Prices & Listing Volumes

The average listing price for used vehicles rose slightly week over week, as the 14-day moving average slightly above $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 40% 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

• Job vacancies climbed to 957,000 in the first quarter, as employers continued to face an increasingly tight Labour market.
• Consumer confidence continues a decidedly negative trajectory. Overall confidence is neutral, however, the forward-looking expectation is weakening significantly driven down by a material drop in real estate confidence, says Bloomberg/Nanos.
• The Canadian dollar remained steady 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 an eighth consecutive week; the prior week increased by +0.10%.
Volume-weighted Car segments increased +0.21%, compared to the prior week’s increase of +0.26%:

• Seven of the nine Car segments increased last week.
• Compact Cars continued to increase, but the gain was only +0.26%, compared to the prior week’s increase of +0.76%.
• Luxury (-0.04%) and Prestige Luxury (-0.03%) were the only Car segments to report declines last week. Luxury has now been reporting declines for four consecutive weeks.
• Sporty Car traditionally declines during this time of year, but the segment is still reporting increases with the segment reporting an average weekly increase of +0.24% over the last eleven weeks.

Volume-weighted Truck segments increased by +0.04%; the previous week had an increase of +0.03%:

• Eight out of the thirteen Truck segments reported increases.
• Full-Size (-0.37%) and Full-Size Luxury (-0.40%) Crossover/SUVs aren’t showing any signs of slowing down the depreciation. The Full-Size Luxury Crossover/SUV segment has been on a downward slide for twenty-three consecutive weeks and has an average weekly decline of -0.46%.
• Compact Crossovers have been increasing for twelve weeks, but the rate of increase slowed down last week to a very minimal +0.001% increase.

Industry News

• Amid rising commodity costs, General Motors Co. is upping the price on its GMC Hummer EV pickup and SUV Nissan calls chip shortage ‘New Normal’ amid supply chain issues.
• Sony and Honda have both recently announced that they’re teaming up to create Sony Honda Mobility, to make EVs
• New research suggests that Volkswagen will overtake Tesla as the world’s largest producer of electric vehicles by 2024. The German company is already the top EV manufacturer in Europe, with new models such as the ID. Buzz launching this year. Tesla remains the number-one electric vehicle maker in the US, claiming 75% of sales in the first three months of this year.