Market Insights – 3/29/2023
Wholesale Prices, Week Ending March 25th
The Canadian used wholesale market saw a slight decline in prices for the week (-0.04%). The Car segment pulls up ahead of Truck/SUV’s with Car prices increasing by (+0.20%) while Truck/SUVs’ segment prices declined (-0.28%). There were 6 out of 22 segments to have values increase for the week. Full-Size Cars lead with (+1.05%) and Near Luxury Cars follow behind at (+0.61%). The segments with the largest declines were Compact Vans at (-2.74%) and Sub-Compact Luxury Crossovers at (-1.00%).
? This Week Last Week 2017-2019 Average (Same Week)
Car segments +0.20% -0.15% +0.01%
Truck & SUV -0.28% -0.25% -0.19%
Market -0.04% -0.20% -0.09%
- Overall car segments increased on average last week by +0.58%.
- There were five segments with a price surge. The largest was Full-Size Car (+1.05%), next was Near Luxury Car (+0.61%) and Sporty Car (+0.45%).
- Four segments had decreases. Sub-Compact Car (-0.31%) and Compact Car (-0.18%) had the largest.
- Overall truck segments decreased on average last week by -0.28%.
- All segments had decreases. Those with the greatest declines were Compact Van (-2.74%) and Sub-Compact Luxury Crossover (-1.00%).
- Other segments with a notable downturn were Minivan (-0.43%), Mid-Size Luxury Crossover/SUV (-0.40%) and Full-Size Pickup (-0.37%).
Used Retail Prices & Listing Volumes
The average listing price for used vehicles was consistent week-over-week, as the 14-day moving average was at roughly $36,000. Analysis is based on approximately 180,000 vehicles listed for sale on Canadian dealer lots.
The Canadian market continued to decrease and the overall decrease was similar historical average. Supply remains low with high demand for more recent and clean condition vehicles on both sides of the border. Upstream channels continue to tap supply before it can be available to wholesale markets. Less segments saw increases this week as the market continues to stabilize.
Conversion rates were quite varied. Some observed sell rates were as low as 26% but most were in the 40-55% range. Last week we saw some sellers dropping floors, which has been contributing to lanes with higher sell rates.
Canadian Black Book’s Market Insights
- Costs of food and non-alcoholic beverages in Canada rose by 9.7 percent annually in February of 2023, remaining at a high level but easing from the 42 year high of 10.4 percent from the prior month.
- The yield on Canada’s 10 year government bond rose to near 2.9%, as investors anticipate a narrower gap between interest rates in Canada and the United States and overall lower interest rates to ensure financial stability.
- The annual inflation rate in Canada fell to 5.2% in February of 2023, the least since January 2022, below market expectations of 5.4% and slowing from the 5.9% in the previous month amid significant base-year effects.
- The Canadian dollar is around $0.728 this Monday morning and nearly matching $0.729 a week prior.
In the U.S., overall, Car and Truck segments increased +0.51% last week; the prior week increased by +0.49%.
Volume-weighted Car segments increased +0.61%, compared to the prior week’s increase of +0.63%:
- Eight of the nine Car segments increased last week.
- For the first time in forty consecutive weeks, the Premium Sporty Car segment moved back into positive territory, with an increase of +0.08%. The segment averaged a weekly decline of -0.46% per week, over the last 40 weeks.
- Full-Size (+0.90%), Sporty (+0.89%), and Compact (+0.88%) Car segments reported the largest gains last week.
Volume-weighted Truck segments increased by +0.46%; the previous week had an increase of +0.43%:
- Eleven of the thirteen Truck segments reported increases last week.
- The Minivan segment reported the largest increase last week, with a gain of +1.66%. The last time this segment reported this large of a gain was May 2021.
- Compact Crossover also had another week with a large gain of +0.86%, after the prior two weeks, where it reported increases of +0.92%.
- Canada Drives is under Creditor Protection as the online Used car sales platform looks to restructure its business operations and focus on its two business lines that are both profitable and less capital intensive.
- 7-Eleven will start building its own proprietary EV charging network called “7Charge” in the U.S. and Canada that will be compatible with both common CHAdeMO and CCS port architectures.
- Electric vehicle production and sales has long been a profitless venture, and Ford Motor Co. confirmed $6 billion in losses due to EV operations, but they do expect profit margins to begin by as much as 8% by 2026.
- The next Hyundai Sonata will receive the brands new “Horizon Lamp” front fascia for its upcoming model refresh that brings the model forward and highlights Hyundai’s consistent investment in the midsize car segment although plans are to discontinue the model after this generation.
