The Canadian economy remains in recession with an anticipated 5.1% real GDP growth expected to return in 2021; unemployment is forecasted to be around 7.7% by the end of the year (pending a second wave of COVID-19); and consumer confidence continues its comeback even amid the crisis.
That’s all part of Canadian Black Book’s latest COVID-19 Market Update, which also indicates that wholesale used vehicle prices continue to strengthen — with the car segment up 0.08% and trucks rising 0.56%.
“This past week marks the ninth week of recovery to pre-pandemic wholesale values, since the initial decline created by the COVID-19 outbreak,” said CBB in its report. “The huge plunge in values remains on hold for this past week this week, similar to the week prior, we have again seen stronger wholesale results for both Cars and Trucks.”
The full-size car segment achieved the largest gain in wholesale values this week, with 1.13%. Subcompact cars followed by a gain of 0.81% ($61) and sports cars with 0.54% ($102). Declines may be coming up for the sports cars and premium sports cars segment, driven by seasonality as the end of the summer-selling season is right around the corner.
The prestige luxury segment fell 0.50% (-$225), followed by luxury cars at 0.44% (-$121). And compact cars were down 0.05% ($5).
The truck segments gained an average of 0.56% over the past week, which was close to the prior week’s all-time weekly record and a jump from the 0.37% record three weeks ago. “Given recent volatility and unknowns, our team feels strongly that more records, possibly negative or positive, will be set before 2020 is into the history books,” said CBB.
Auctions continue to operate digitally with sales reaching 80% of normal levels. Used vehicle inventory remains a concern as supplies are tight and demand for these vehicles is strong. The average days to turn for used car inventory for the past week was 55 — which is lower than typical levels. However, consumer confidence continues to grow and CBB said some measures put it at a 75%-level recovery.
The Canadian has recovered all the value it lost from the early days of the pandemic, making exporting to the U.S. more expensive. And yet there are still some benefits to consider for dealers in this game.
To read the full CBB report, click here.
