Canadian wholesale prices for cars and trucks declined again, now for the seventh week in a row, with cars down an average of 0.17% and trucks down 0.02%, according to Canadian Black Book’s COVID-19 update.
The average weekly decline for cars in November was 0.22% while trucks were down 0.15%, which is less than the same time last year. In November 2019, cars were down 0.39% and trucks 0.41%. It’s also worth noting that U.S. wholesale used vehicle prices were down 0.48% for cars and 0.33% for trucks this past week.
“As we begin the final month of the year, a year that has challenged us all, it is worth taking stock of how very resilient the auto sector has been in Canada, despite the towering mountain of adversity faced throughout 2020,” said CBB in its report. “Sales this year are down by over 20% so far.”
Although this number may have appeared inconceivable back in January, CBB said some of the initial estimates of sales trends were significantly worse.
Back in April, CBB was also forecasting two possible scenarios for new vehicle sales this year: one was based on an expected decline in sales of 40% (due in large part to extended forced closures of retailers and significant declines in demand for vehicles); the other offered a more optimistic view of sales declining by 25%. That last one was based on the re-opening of dealerships and sales expected to be more resilient.
“Thankfully, we were very close on the second count and the 40% scenario did not come to fruition,” said CBB. “This year has also seen a remarkable rebound in wholesale prices for used vehicles, which initially plunged by over 7%, then rebounded by 10%, to set new record levels for retained values.”
On trade, dealers may deem the recent announcement that Canada and the United Kingdom have reached a tentative free trade agreement as good news, since the $27 billion in trade between the nations will include products such as Jaguar-Land Rover, MINI, Bentley, Rolls-Royce and McLaren.
General Motors has also reportedly started construction at the Oshawa assembly plant for pickup truck production in 2022, thanks to a recent contract agreement between GM and Unifor union.
“GM is touting this initiative as being one of the fastest facility transformations it has undertaken,” said CBB. “The plan is to hire just shy of 2,000 employees to produce highly in-demand GM full-size trucks. There is an investment of $1.3 billion to make this happen.”
CBB said the investment is one of the outcomes of “one of the most remarkable seasons” of automotive contract negotiations.
