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August 24, 2023 by Adam Malik
August 24, 2023 by Adam Malik
Image credit: Depositphotos.com
A problem sourcing used vehicles and historically high pricing continues to be the name of the game in the used vehicle sector.
Analysis from both DesRosier Automotive Consultants and Canadian Black Book show a reduction in pricing at this point in 2023 compared to the same time last year — though not by very much.
Year-over-year, Canadian Black Book’s Used Vehicle Retention Index for July 2023 showed a 1.4 per cent decrease following a 0.3 per cent month-over-month decrease from June.
“Canadian wholesale price remain high as we pass the mid-point of summer,” said David Robins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book. “Trucks and SUV’s continue to decrease at an above average rate as consumers look to lower-cost vehicles.”
In its poll of Used Car Dealers Association members, DesRosiers found sales results are on pace with last year for independent dealers with 67 units on average sold — that’s equal to the average amount sold during the same period last year.
“The latter parts of 2022 and the first half of 2023 saw some moderation in used vehicle prices as improved new vehicle supply began to partially alleviate some pressure from used vehicle demand,” said DesRosiers managing partner Andrew King in a press release.
But new vehicle dealers’ used departments are tracking a bit higher with an average of 155 sales, up from 148 a year ago. The boost is coming from trade-ins as new vehicle sales increase.
This is of benefit to the aftermarket.
“Now, there could be a counterintuitive shift: Surging new-vehicle supply could further boost expansion of the used-vehicle fleet, bringing more high-mileage vehicles into service bays,” S&P Global Mobility recently observed.
That said, DesRosiers pegged full-year sales expectations at 305 units for franchised new dealers and 140 for independents, which is lower than forecasted at the start of the year.
Trouble sourcing vehicles hit independent members harder with 51 per cent saying these challenges have gotten worse — just 12 per cent saw improvement. They’ve been using auctions for the most part to source vehicles, compared to dealers who’ve been buoyed by trade-ins.
This raises the concern that if dealers are the leading source for used vehicles, will they try to keep those vehicles in their service bays? Even though dealers have traditionally focused on the new-to-five segment, a decline in new vehicles has pushed them to focus more on older vehicles — those that would traditionally be considered in the aftermarket sweet spot. They may not even be discriminating against other brands either, Lang Marketing reported. They’re taking an ‘all years, all nameplates’ approach.
“To promote their service bays to used-vehicle buyers, many dealers are expanding their use of aftermarket brands, which generally have lower prices than OE parts, and are providing special promotions for frequently performed repairs,” Lang said.
August 24, 2023 by Adam Malik
What’s happening with used vehicles?
Image credit: Depositphotos.com
A problem sourcing used vehicles and historically high pricing continues to be the name of the game in the used vehicle sector.
Analysis from both DesRosier Automotive Consultants and Canadian Black Book show a reduction in pricing at this point in 2023 compared to the same time last year — though not by very much.
Year-over-year, Canadian Black Book’s Used Vehicle Retention Index for July 2023 showed a 1.4 per cent decrease following a 0.3 per cent month-over-month decrease from June.
“Canadian wholesale price remain high as we pass the mid-point of summer,” said David Robins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book. “Trucks and SUV’s continue to decrease at an above average rate as consumers look to lower-cost vehicles.”
In its poll of Used Car Dealers Association members, DesRosiers found sales results are on pace with last year for independent dealers with 67 units on average sold — that’s equal to the average amount sold during the same period last year.
“The latter parts of 2022 and the first half of 2023 saw some moderation in used vehicle prices as improved new vehicle supply began to partially alleviate some pressure from used vehicle demand,” said DesRosiers managing partner Andrew King in a press release.
But new vehicle dealers’ used departments are tracking a bit higher with an average of 155 sales, up from 148 a year ago. The boost is coming from trade-ins as new vehicle sales increase.
This is of benefit to the aftermarket.
“Now, there could be a counterintuitive shift: Surging new-vehicle supply could further boost expansion of the used-vehicle fleet, bringing more high-mileage vehicles into service bays,” S&P Global Mobility recently observed.
That said, DesRosiers pegged full-year sales expectations at 305 units for franchised new dealers and 140 for independents, which is lower than forecasted at the start of the year.
Trouble sourcing vehicles hit independent members harder with 51 per cent saying these challenges have gotten worse — just 12 per cent saw improvement. They’ve been using auctions for the most part to source vehicles, compared to dealers who’ve been buoyed by trade-ins.
This raises the concern that if dealers are the leading source for used vehicles, will they try to keep those vehicles in their service bays? Even though dealers have traditionally focused on the new-to-five segment, a decline in new vehicles has pushed them to focus more on older vehicles — those that would traditionally be considered in the aftermarket sweet spot. They may not even be discriminating against other brands either, Lang Marketing reported. They’re taking an ‘all years, all nameplates’ approach.
“To promote their service bays to used-vehicle buyers, many dealers are expanding their use of aftermarket brands, which generally have lower prices than OE parts, and are providing special promotions for frequently performed repairs,” Lang said.
