Canadian Black Book released a 2025 market preview, which first underlined that the Canadian auto industry experienced a transformative 2024 thanks largely to some noteworthy shifts in vehicle availability, pricing, and market dynamics.
In the new vehicle market, CBB said inventories continue to recover but that prices have risen upwards of 30 per cent on average and with interest rates at decade high levels. The impact was felt by many brands, including entry-level and mid-tier luxury segments.
In the used vehicle market, CBB said retained values declined for most of 2024 and that the market only corrected pricing down by 8 per cent year-over-year, “as the allure of our inventory to U.S. buyers stopped the bleeding of our vehicle values towards the last quarter of the year.” It helped larger crossovers and SUVs in the luxury category, and full size pickups.
High interest for hybrid and plug-in hybrid electric vehicles also helped keep values from falling; full EVs lost favour in most marketplaces.
The year ahead
Looking ahead at 2025, CBB said industry projections need to consider factors such as the economy, politics, and technological factors. They said ongoing U.S. and Canadian political volatility, and a lack of clarity as to where the EV market is headed, add new challenges.
On used vehicle depreciation, they said 2025 will be “heavily influenced by a shrinking supply of late model used vehicles, which will prop values up before further declines in 2026 and 2027 bring used vehicle values closer to long-term historical norms.”
The result is a forecasted overall level of depreciation that is less than the last 24 months. CBB said it anticipates 12 per cent depreciation for two-to-six-year-old vehicles this year.
For used vehicle supply, of up to eight years old, they expect it to decrease by 3.2 per cent to 1.57 million units. “This decline is on the backs of reduced overall sales between 2020 and 2023 of roughly 1.2 million vehicles, while lease originations during this time reached a low of 18 per cent.
[Insert used vehicle supply chart]
For new vehicles, they said 2025 will be “littered with uncertainty” around new vehicle sales volume thanks to tariff threats and the undoing of some model electrification plans. “New vehicle launches are currently being redirected in hopes of better timing, as affordability issues are addressed to lure consumers back to the dealership.”
The full report is available here.
