06.25.2024

Market Insights – 6/25/2024

Wholesale Prices, Week Ending June 22nd, 2024

The Canadian used wholesale market saw a decline in prices for the week at –0.22%. The Car segment fell by –0.21% and the Truck/SUVs segment prices declined –0.22%. The only positive segment was Compact Van at +0.57. The car segments with the largest declines were Full-Size car at –0.81% followed by Compact Car at –0.42%. The largest declines for the Truck/SUV segments were, Mid-Size Luxury Crossover/SUV at –1.17% followed by Compact Luxury Crossover/SUV at –1.14%.

Car Segments

• Last week there was an overall decrease of -0.21% seen in Car segments. This decrease was noted all nine segments.​
• The segments with the smallest decrease were Premium Sporty Car at (-0.09%), followed by Sporty Car at (-0.11%) and Mid-Size Car at (-0.16%).​
• The largest decreases were seen from Full-Size Car (-0.81%), Compact Car at (-0.42%) and Sub-Compact Car at (-0.38%).

Truck / SUV Segments

• There was an overall depreciation in truck values of –0.73% last week. Twelve of the thirteen segments reflected this. ​
• Segments with the largest drops were Mid-Size Luxury Crossover/SUV (-1.17%), Compact Luxury Crossover/SUV (-1.14%), Full-Size Pickup (-1.04%) and Full-Size Luxury Crossover/SUV (-0.73%).   ​
• One segment showed an increase. That segment was Compact Van (+0.57%). 

Wholesale

The Canadian market continues its decline compared to the previous week. Upstream channels have been accessing supply before it appears in the wholesale market, this has led to an increase in inventory, driven by rising demand for vehicles at auctions on both sides of the border. Nearly 60% of segments saw an average value change exceeding $100 this week, with Truck segments experiencing a decrease 52% larger than that of the Car segments. Auction sale rates ranged from 17% to 53%, reflecting a decline in average conversion rates for the week. The variation in sale rates across different lanes could be attributed to the decrease in floor prices. 

​Used Retail Prices & Listing Volume

​The average listing price for used vehicles was slightly down week-over-week, as the 14-day moving average was at $34,000. This analysis is based on approximately 220,000 used vehicles listed for sale on Canadian dealer lots. ​

Market Insights

Economics & Government

• New home prices in Canada were up 0.2% in May 2024, in line with market forecasts, following also a 0.2% increase in the previous month.  ​
• Retail sales in Canada are projected to have dropped by 0.6% in May 2024 compared to the previous month, according to a flash estimate.​
• The Raw Materials Price Index in Canada fell by 1% month-over-month in May 2024, reversing from the downwardly revised 5.3% rise in the previous month and falling short of market forecasts of a 0.6% decrease.​
• The yield on the Canadian 10-year government bond increased slightly to 3.37%.​
• The Canadian dollar is around $0.732 this Monday morning, up slightly from $0.725 a week prior. 

U.S. Market

The market continues to decline at about half a percent per week, which is higher than the pre-pandemic average of nearly a quarter percent for this time of year. Auction activity remains steady with the conversion rate consistently at 56%. 

Industry News

• As of June 18th, the province of B.C. is revising its EV incentive by reducing the qualifying MSRP to $50,000 for all body styles. This is down from $55,000 for passenger cars and $70,000 for Crossovers and Trucks, which will impact adoption in the province by pushing prices further out of reach of many would-be buyers.​
• A full redesign of the BMW X3 compact crossover has been released, showcasing a very different design language and some new powertrains. Now in its 4th generation, the model will launch in Q4 of this year, and will be equipped with either a familiar 2.0T litre base engine or an upgraded inline 6-cylinder with 48V mild hybrid assist, making 393hp.​
• CDK Global suffered a cyberattack on June 19th, crippling its dealer management software that supports upwards of 15,000 dealerships. With no resolution currently reported, the DMS company has had dealers resort to “old school” tactics of recording sales by pen and paper while some have also been supported by rival DMS providers to help ease the implications.​
• EV start-up brand Fisker has filed for Chapter 11 bankruptcy protection early last week as it has been in financial trouble, seeking out a possible strategic partner in its efforts to stay operational. The brand had been selling the Ocean mid-size crossover in 2023 and 2024.​
• Volvo Cars is ending production of the brands S60 sedan in North America at the end of this month, as it looks to streamline its lineup to go all-electric. Weak demand for the model reduced its model year, selling just 1,130 units in Canada this year.