Wholesale used vehicle price trends in Canada remained strong on the car side, while showing significant increases on the truck side, according to Canadian Black Book’s latest COVID-19 Weekly Automotive Market Update.
On the heels of a mild 0.04% decline last week, nine car segments were up 0.11%, on average, this past week while trucks/SUVs/crossovers were up a remarkable 0.62% — the largest weekly increase in two years. This is the fourth consecutive week that the segment increased in value.
“It remains the outlook of the CBB team that there will still be an additional drop in wholesale prices, compared to our pre-COVID-19 expectations this year,” said CBB. “This further decrease in values will occur this fall/winter as the Canadian auto sector works to recover from the damage caused by COVID-19.”
CBB said it revised its outlook this week on the total wholesale price impact, based on recent market data. It now expects wholesale prices to dip 10% lower, on average, compared to pre-pandemic estimates, for the rest of the year. The original expectation was a 17% decline.
CBB also expects the car segments to decline by 13% during the same period, while the truck and crossover/SUVs segments will only decline by 8%. Recovery is expected to begin in early 2021.
Auctions
On the auction front, ADESA and Manheim wholesale auctions in Canada are still operating through online offerings only, and there is no firm estimate on when physical live auctions will reopen. However, most auctions do allow buyers to browse the lot prior to the sale, which CBB said is a “positive step” that can help boost confidence in bidders.
At the moment there is one physical auction still operating in Quebec (ESP Auto Auction in Lachine), and two independent auctions in New Brunswick (Jardine Auctioneers in Fredericton and Great Northern in Moncton).
During the past week, CBB said auction values have strengthened for the truck/crossover/SUV and car segments. Price increases over the most recent weeks are being driven in part by low inventory levels, which remain as such.
“Looking towards the later part of summer and into the fall, it is Canadian Black Book’s expectation that overall volume at auction will increase and may ultimately exceed volumes versus last year,” said CBB. “The current lack of supply on dealers’ lots is posing a real issue. Retailers are actively reporting that they continue to hold onto many trades which they would have normally sent to auction.”
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