The year 2021 ended on a positive note for the Canadian used wholesale market which saw an increase once again, marking the 21st straight week of price increases. Declining inventory continues to drive the increase as 16 of the 22 vehicle segments saw price increases, Canadian Black Book reported in this week’s CBB Automotive Market Update.
There are a number of factors fueling the wholesale market’s growth. “Supply remains low while demand continues to be strong on both sides of the border. Upstream channels continue to tap supply before it can be available at physical auctions,” the CBB said in their report.
Favourable U.S. market exchange rates and strong conversion rates also continue to be a factor. “Rates were observed into the 70% 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,” the CBB added.
These factors translated into price increases for the week ending December 31st, as prices were up +0.32% overall, with “car segments up +0.52% and Truck/SUV segments up +0.13%. The largest price increase was seen in the Compact Van segment (+1.49%), followed by Near Luxury Car (+1.37%),” the CBB reported.
In addition to an increase in the Near Luxury Car segment, Full Size Cars (+0.97%) and Mid-Size Cars (+0.56%) also increased. The Sporty Car segment was the only segment to see a price decline for the week (-1.00%).
Compact Vans weren’t the only Truck segment to see an increase. The Full-Size Van segment saw an increase of +1.33%, with decreases seen in Full-Size Pickup (-1.08%) and Full-Size Crossover/SUV (-0.56%) segments.
A number of historic highs were seen across the industry. The 14-day moving average listing price for used vehicles now sits slightly below $32,500. The Canadian Black Book Used Vehicle Retention Index finished the month at an historic 158.5 points, an increase of 5.9 points from November.
The Index tracks the retained value performance of two to six-year-old vehicles, and year-over-year is up 42.4% from 111.5 points in December of 2020. Although Full-Size Pickup segments had an overall decline over the month of December, Compact Van, Sub-Compact Car, and Full-Size Van segments saw large increases.
Canadian Black Book’s Market Insights focused on stability — noting that a recent Nano Report found consumer confidence was relatively stable and the Canadian dollar remained stable, finishing the week at $0.79 despite provincial governments introducing new pandemic restrictions.
Despite the chip shortage Hyundai, Kia forecast a 12% sales increase for 2022, and Ford noted that they will build nearly twice as many F-150 Electric Trucks due to high demand. Mercedes’ new all-electric concept car EQXX pushed industry expectations with claims that the vehicle can go 1,000 km on a single charge. Of note, for the first time since 1931, General Motors has not led U.S. auto sales for a full year, with Toyota Motor Corp outselling GM in the United States in 2021.
Source: Used wholesale market ends 2021 with historic highs. Canadian auto dealer. (2022, January 7). Retrieved January 10, 2022, from https://canadianautodealer.ca/2022/01/used-wholesale-market-ends-2021-with-historic-highs/