CBB Weekly Automotive Market Update 05/26/2022

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Wholesale Prices, Week Ending May 20th

The Canadian used wholesale market saw overall prices remain decline for the week (-0.17%). The Car segment continues to outperform the SUV/Truck segment for the 8th straight week. The Car segment saw prices decline (-0.12%), while the Truck/SUV segment saw prices decline -0.22%, both slightly higher than the seasonal average decline seen pre-pandemic. 8 of 22 sub-segments saw prices increase for the week, with Minivan (+0.31%) leading the way, followed by Prestige Luxury Car and Sporty Car (+0.30%).

	This Week	Last Week	2017-2019 Average (Same Week)
Car segments	-0.12%	+0.06%	-0.07%
Truck & SUV segments	-0.22%	-0.12%	-0.08%
Market	-0.17%	-0.03%	-0.07%

Car Segments

• Overall, the volume-weighted wholesale used Car prices decreased by -0.12% for the week.
• Both Prestige Luxury Car & Sporty Car segment saw the largest price increase for the week (+0.30%), followed by Full-Size Car (+0.21%).
• Luxury Car segment saw the largest prices drops for the week, down -0.62% followed by Near Luxury Car (-0.55%).

Truck Segments

• Overall, volume-weighted wholesale used Truck/SUV prices decreased for the 8th straight week (-0.22%).
• Minivan segments saw the largest price increase for the week (+0.31%), followed by both Small Pickup and Full-Size Pickup both up +0.29% for the week
• Sub-Compact Luxury Crossover segment saw the largest prices decline for the week (-1.31%), followed by Full-Size Van (-1.13%) and Full-Size Luxury Crossover/SUV (-0.32%).

Used Retail Prices & Listing Volumes

The average listing price for used vehicles remained stable for the week, as the 14-day moving average remains slightly below $38,000. 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 with improvements 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 mostly under 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

• Canadian Consumer Prices rose 6.8% year over year, a slight increase from March (+6.7%), Largely driven by food and shelter prices.
• Canadian Consumer Confidence hits low not seen since November 2020. Negative pressure on all dimensions tracked including job security, real estate values, personal finances, and forward look on the economy, says Nanos Report.
• The Canadian dollar remained flat against the USD, finishing the week at $0.78.

U.S. Market

In the U.S., overall, Car and Truck segments (+0.20%) increased for a fourth consecutive week; the prior week increased by +0.21%.

Volume-weighted Car segments increased +0.37%, compared to the prior week’s increase of +0.44%:

· Eight of the nine Car segments increased last week.
· Compact Cars increased for a ninth consecutive week. Last week the segment gained another 0.68%.
· Near Luxury Car (+0.20%) and Prestige Luxury Car (+0.23%) accelerated the rate of gains last week compared to the prior week’s increases of +0.13% and +0.11%, respectively.
· Premium Sporty Car continued to be the only Car segment to report a decline with the segment declining -0.35% last week. The segment has been declining for 24 consecutive weeks.

Volume-weighted Truck segments increased by +0.11%; the previous week had an increase of +0.10%:

· Nine out of the thirteen Truck segments reported increases.
· Full-Size Trucks increased for the second week, +0.11% compared to the prior week’s increase of +0.08%.
· The less fuel-efficient SUVs, Full-Size and Full-Size Luxury, reported the largest declines last week of -0.16% and -0.30%, respectively.
· Full-Size Vans declined -0.06%, but this is interpreted as stability in this market after a record streak of increases and it is expected the segment will return to gains as new supply has not improved.

Industry News

· Volkswagen chief says German car giant will overtake Tesla on electric vehicle sales by 2025
· Intel CEO says 'we're about halfway through' the chip shortage · Ford Motor Co will pay $19.2 million to resolve allegations it falsely advertised real-world fuel economy and payload capacity for some hybrids and pickup trucks, the Iowa Attorney General’s Office said Tuesday.
· Honda has formally previewed the 2023 CR-V in a series of official images from the Japanese marque. The photos, which give us a good look at the upcoming new generation compact crossover, came after a confirmation from earlier this month that the next CR-V and CR-V Hybrid are coming this year.