Source: DesRosiers Automotive Consultants Inc.
Where are all the used vehicles headed? According to DesRosiers Automotive Consultants (DAC), nearly 310,000 units flowed into the United States in 2020 and a smaller number (less than 9,000 units) were imported into Canada.
There are many factors that influence the balance of the Canadian used vehicle supply/demand equation, and the flow of vehicle imports and exports is one of the critical ones. Supply shortages and huge price gains are partly to blame for the issue.
“The United States has been importing used vehicles from Canada at dramatically higher levels in recent years,” said DAC. “During the period of 2007 to 2014, when the Canadian dollar was near or above par with its U.S. counterpart, imports of used vehicles into the U.S.. fell to a trickle—accounting for only 6,000 units in 2008.”
During those years when the Canadian dollar was more robust, the flow of vehicles was almost entirely heading north. Used vehicle imports into Canada peaked in 2008 at nearly 160,000 units, according to DAC.
“As the exchange rate changed so did the flow of vehicles, with imports into the U.S. peaking in 2016 at a high of nearly 345,000 units—a substantial total, given the size of the Canadian used vehicle market that year was 2.89 million units,” said Andrew King, Managing Partner of DAC.
Over the past 12 months DAC observed a 10 cent appreciation of the Canadian dollar. However, due to the current market conditions, there are still questions around whether or not exports to the U.S. will fall as typically expected.
