CBB Weekly Automotive Market Update 05/10/2022

To download this report as a PDF, click here.

Wholesale Prices, Week Ending May 6th

The Canadian used wholesale market saw overall prices decline for the 6th straight week (-0.23%). The Car segment outperformed the SUV/Truck segment for the 6th straight week, as consumers shifts to smaller, more fuel-efficient vehicles amidst high gas prices and rising interest rates. Both the Car segment and The Truck/SUV segment saw prices decline for the week, down -0.13% and -0.32% respectively. 6 of 22 sub-segments saw prices increase for the week, with Full-Size Pickups (+0.32%) leading the way, followed by Sub-Compact Car (+0.17%).

	This Week	Last Week	2017-2019 Average (Same Week)
Car segments	-0.13%	+0.18%	-0.21%
Truck & SUV segments	-0.32%	-0.26%	-0.17%
Market	-0.23%	-0.04%	-0.19%

Car Segments

• Overall, the volume-weighted wholesale used Car prices declined by -0.13% for the week.
• Sub-Compact Car segment saw the largest price increase for the week (+0.17%), followed by Premium Sporty Car (+0.08%) and Compact Car (+0.06%).
• The Luxury Car segment saw the largest prices drops for the week, down -0.43% followed by Mid-Size Car (-0.34%) and Near Luxury Car and Sporty car both down -0.22%.

Truck Segments

• Overall, volume-weighted wholesale used Truck/SUV prices decreased for the 6th straight week (-0.32%).
• Only 2 Sub-segments saw prices increase for the week, with Full-Size Pickup leading the way (+0.32%), followed by Sub-Compact Crossover (+0.06%).
• Compact Van segment saw the largest prices decline for the week (-1.27%), followed by Sub-Compact Luxury Crossover/ segment (-1.00%) and Full-Size Crossover/SUV (-0.75%).

Monthly Retention Index

For the first time in 9-months. the Canadian Black Book Used Vehicle Retention Index declined vs previous month. The Index, which tracks the retained value performance of 2- to 6-year-old vehicles, finished the month at 162.6 points, decreasing 2.4 points from March. Year-over-year, the Index is up 34.0% from 121.3points in April of 2021. For the 2nd straight month Full-Size Van segments saw the largest increase, followed by Premium Sporty Car and Prestige Luxury Car. Compact Vans, Compact Crossover and Mid-Size Crossover/SUV all saw the largest decline month-over-month.

Used Retail Prices & Listing Volumes

The average listing price for used vehicles remain at historic highs, however prices remain relatively stable week-over-week, as the 14-day moving average remains 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 remain stable overall but slightly negative territory again. Newer vehicles tend to be outperforming vehicles aged three years and older.

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 increased this past week, as rates were observed into the 45% range on some 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 continues to decline. The unemployment rate edged down 0.1 percentage points to 5.2% in April. The unemployment rate for people aged 25 to 54 fell 0.2 percentage points to 4.3%, the lowest on record.
• Consumer confidence trajectory remains negative over the last 12 months, with the past 4 weeks having shown negative pressure on real estate values.
• The Canadian dollar held steady against the USD, finishing the week at $0.77.

U.S. Market

In the U.S., overall, Car and Truck segments (+0.13) increased for the second week; the prior week increased by +0.11%. Volume-weighted Car segments increased +0.31%, compared to the prior week’s increase of +0.38%:
• Seven of the nine Car segments increased last week.
• Sub-Compact Cars (+0.71%) have been increasing for the past eight weeks, but last week’s increase was the largest seen since before Thanksgiving last year.
• The Sporty Car (+0.23%) segment gained additional strength this past week after the prior week’s minimal increase of +0.06%.
• Premium Sporty (-0.29%) and Near Luxury (-0.01%) were the only Car segments to report declines.

Volume-weighted Truck segments increased by +0.05%; the previous week had a decrease of -0.02:
• Seven out of the thirteen Truck segments reported increases.
• Compact Van (+0.81%) and Minivan (+0.72%) segments were the largest gainers last week. Surprisingly, the Full-Size Vans slowed down from the record streak of increases, but only by a small -0.01% decline. This negative adjustment is not expected to continue as a trend for the segment due to supply remaining low.
• Full-Size Trucks have slowed their pace of declines in recent weeks with last week’s decline being -0.02%, after the previous week’s decline of -0.13%.

Industry News

• The global chip shortage is forcing BMW to ship its vehicles without Android Auto and CarPlay. The automaker will inform affected customers once the chips are eventually in stock so that they can have them installed in their cars from a nearby service station.
• Ford Teases a New Electric Car to One Up Tesla, GM, and Rivian. The legacy carmaker has just started production of the long-awaited F-150 Lightning, an electric version of the best-selling F-150.
• Ford is selling some of its Rivian shares, report says. Ford owns about 12% of the EV producer, or just under 102 million shares after taking a stake prior to Rivian going public last year.