In eyeing automotive industry prices, DesRosiers Automotive Consultants has observed key areas diverging.
DAC said inflationary pressures from 2021-2023 impacted the Canadian economy — particularly the used vehicle market. But now that new vehicle supply shortages have been resolved, and the Bank of Canada started a rate cutting cycle, they say the picture has changed “dramatically.”
“It is clear that the automotive market is seeing countervailing forces at play,” said Andrew King, Managing Partner at DAC, in a statement. “The new and used markets are heading in different directions as industry dynamics reshuffle the landscape and the market works toward a new equilibrium.”
DAC said pockets of inflation remain: passenger vehicle insurance premiums rose 8.1% year-over-year in June, and passenger vehicle parts and maintenance experienced a 3.5% increase. As a category with maintenance and repair services themselves, DAC also noted a 4.2% increase — and parts CPI was up 2.9%.
On the other end, the used vehicle market, purchase prices have started to decrease — down 4.5% compared to June 2023. “This is in contrast to new vehicle CPI, which remains positive at 1.8% — supported by the twin moves toward SUVs and ZEVs,” said DAC.
Gasoline, which DAC said is acting as something of a stabilizing force, came in flat for June at 0.4%.
