Even before the U.S. tariffs were imposed, DesRosiers Automotive Consultants was warning that vehicle pricing will be a huge issue across the industry.
The firm looked at where things currently stand in the various areas of the automotive ecosystem and found the picture that emerged was one of “decidedly different trends.”
They said the consumer price index or CPI for the purchase of new passenger vehicles remained mostly flat as of December. At the time, it was 0.9% above a year earlier. But the CPI for used passenger vehicles was down
“The overall operation of the passenger vehicles category saw the CPI rise 4.3% in the same period with passenger vehicle insurance premiums specifically seeing significant growth at 8.7%,” said DAC in its update.
As for the more global image of Canadian retail sales, the auto sector experienced continued growth in key parts of the market. For example, new vehicle dealers saw retail sales jump 3.7% compared to 2023, up to $174.0 billion. And used vehicle dealers saw retail sales increase 2.2%. That’s more than 2023 and 2022 results, but 5.1% below the record high 2021 market.
“Automotive parts, accessories, and tire stores saw a more modest 1.1% increase in retail sales for 2024 to $15.4 billion, building on an uninterrupted pattern of growth since well before the pandemic,” added DAC. “Gasoline stations, however, saw retail sales pull back 2.7%, due largely to lower gas prices.”
In a statement, Andrew King, Managing Partner at DAC, highlighted an “interesting development” observed at the end of 2024, which was that the “continuing rise of retail sales at new and used dealers contrasted against the flat to negative CPI for the principal products of those players.”
