New vehicle sales were down significantly in November, Canadian wholesale vehicle prices for both cars and trucks declined for the eighth consecutive week, and depreciation is less than what it would typically be at this time of year, according to Canadian Black Book.
In its COVID-19 automotive update for the week of December 8, CBB said new vehicle sales have declined by 10.4% in November based on data estimates from DesRosiers Automotive Consultants (DAC).
“There are many reasons for such a sharp decline in November, much of which relates back to the fundamentals of supply and demand. On the demand side, consumers do not have to look far to find reasons to stay home and not shop for cars right now,” said CBB.
Restrictions for business in Ontario and Quebec will not help dealers get more showroom traffic either. And consumer buying has remained flat for months, which suggests that consumers are taking a “wait-and-see” approach with many non-essential purchases. However, it’s worth noting that unemployment fell by 0.4% to 8.5% in November, as more than 372,000 Canadians were able to find a job.
Cars and trucks were down in wholesale value, on average, by an identical 0.23% from the previous week. In the U.S., the car and truck segments (wholesale prices) fell by 0.78% and 0.68% respectively.
The Canadian dollar also hit a two year high this past week — a trend that, if continued — will lead to negative demand pressure for Canadian exports of used vehicles to the U.S.
“Regarding supply, there are many disruptions across the industry, some major and some minor,” said CBB. “Due to parts shortages, or other challenges, many global plants are not running at capacity and product is much slower to be built and shipped to dealerships worldwide.”
Since supply is currently limited, CBB said continued pressure on used vehicle prices is keeping them up more than they would be during this time of year.
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