08.13.2024

Market Insights – 8/13/2024

Wholesale Prices, Week Ending August 10th, 2024

The Canadian used wholesale market saw a decline in prices for the week at –0.23%. The Car segment fell by –0.20% and the Truck/SUVs segment prices declined -0.26%. The top 2 Segment with positive changes this week were Full-Size Luxury Crossover/SUV with +0.08 and Compact Van +0.07 . Car segments with the largest declines were Sub-Compact Car at –0.53% followed by Full Size Car at –0.49%.The largest declines for the Truck/SUV segments were, Full Size Van at –0.64% followed by Compact Luxury Crossover/SUV at –0.55%.

Car Segments

• Last week there was an overall decrease of -0.20% across Car segments. This decrease was noted across eight out of nine segments.
• The Compact Car segment (+0.02%) showed an increase, with Luxury Car (-0.02%) and Prestige Luxury Car (-0.09%) showing the smallest declines.
• The largest decreases were seen from Sub-Compact Car (-0.53%), Full-Size Car at (-0.49%) and Mid-Size Car at (-0.36%).

Truck / SUV Segments

• Last week there was an overall decrease of –0.26% seen in truck segments. Nine of the thirteen segments reflected this change.
• Full-Size Van (-0.64%) showed the largest decline, followed by Compact Luxury Crossover/SUV (-0.55%) and Mid-Size Luxury Crossover/SUV (-0.53%).
• There were four segments with slight increases. Full-Size Luxury Crossover/SUV (+0.08%) and Compact Van (+0.07%) had the largest.

Wholesale

The Canadian market continues to show a steady gradual decline. Less than 23% of market segments saw an average value change greater than ±$100, showing a decrease compared to the previous week. Among these, Truck segments saw a decrease 6% larger than that observed in the Car segments. Monitored auction sale rates ranged from 12% to 96%. The continued drop in floor prices highlights the variations in sale rates across different lanes. Less supply entering the wholesale market has been noted as upstream channels continue to secure early access. There continues to be a high demand on both sides of the border for increase in inventory and vehicles at auctions.

Used Retail Prices & Listing Volume

The average listing price for used vehicles is stable, as the 14-day moving average was at $34,400. This analysis is based on approximately 220,000 used vehicles listed for sale on Canadian dealer lots.

Market Insights

Economics & Government

• The Canadian unemployment rate held steady at 6.4% in July 2024, standing firm at the elevated levels seen in January 2022 and falling below the anticipated 6.5%.
• In June 2024, the total value of building permits dropped by 13.9% compared to the previous month, amounting to $9.9 billion, contrary to market expectations of a 5.6% increase. This followed a revised 12.7% decline in the previous month.
• The value of building permits in Canada saw a substantial 13.9% drop to $9.9 billion in June, continuing the downward trend from May.
• The yield on the Canadian 10-year government bond increased slightly to 3.08%.
• The Canadian dollar is around $0.728 this Monday morning, representing a slight increase from $0.723 a week prior.

U.S. Market

• The depreciation rate for August is starting higher than pre-pandemic norms, but the overall market is currently depreciating at a much lower rate than at the beginning of July. For instance, the week ending July 12th saw a depreciation rate of -0.60%, whereas last week the market reported -0.32%.

Industry News

• Conservative and Liberal government parties are both touting the necessity to impose tariffs on Chinese–made electric vehicles. Pierre Poilievre said if elected Prime Minister in the next election would action tariffs as would the Liberal Party which has just completed the required consultations to do so.
• The 2024 Dodge Charger EV looks to go on sale later this year in only B.C. and Quebec to start. Launching with the Daytona R/T trim first which will cost $57,790; producing 496hp and 404lb.ft. of torque powering all 4 wheels. The Daytona Scat Pack will come in 2025 and improve performance with 670hp and 627lb.ft. of torque, starting at $89,790.
• Luxury brands like Mercedes-Benz, BMW, Mini, and Audi are still investing in internal combustion powertrains today. Without the high interest that EVs recently had in some key markets globally, German automakers have scaled back plans to invest solely in electric vehicles.
• Decreases in plant utilization are popular conversation for automakers as they look to the future of vehicle production. Anticipating to build less than two-thirds of their capacity in 2030, says GlobalData. With possibility to stay under-utilized passed 2035, the decrease in utility has been cited in the uneven transition to production of battery-electric vehicles. The average production rate of plants in North America are up over the last 4 years, but still only at 70%.
• Acura’s number 1 selling model in Canada has been refreshed for 2025. The RDX gets a more aggressive front fascia, new paint colors, and updated interior appointments focused on the centre console and screen improvements – adding a widescreen mode for the newly available wireless Android Auto and Apple CarPlay.