Canadian wholesale vehicle prices were down for the twelfth consecutive week during the last week of 2020, with wholesale values for cars decreasing on average 0.30% and trucks declining 0.13%, according to Canadian Black Book’s COVID-19 update for the week of Jan. 5, 2021.
The largest decreases in the car segment came from sports cars (-0.51% or $95), followed by sub-compact cars (-0.46% or $32), and near luxury cars with a decrease of -0.45% ($87). For trucks, the largest decrease was the sub-compact luxury crossover category (-1.09% or $189), while the largest increase was full-size pickup trucks at a gain of 0.37% ($101).
U.S. wholesale used vehicle prices were also down, with cars falling 0.70% and trucks down 0.33%. It is also worth noting that the Canadian dollar closed the year at $0.7854 — nearly reaching the two-year high set on Dec. 17, 2020. It would be better for the demand for Canadian exports of used vehicles to the U.S. if the dollar did not continue its progressive strengthening. However, CBB said that with 2020 now gone, there is reason to look ahead to 2021 “with a refreshed sense of optimism.”
“Admittedly, some of the same trends that doggedly weighted the industry down in 2020 persist, however the path to resolve the crisis is now clearly marked,” said CBB. “It revolves around the recovery to the health of the world, followed by economic rebuilding. The vaccination rollout, not only here in Canada but globally, is the key to the restoration of businesses and the lives of so many.”
CBB expects two key trends to chart the course for 2021, which will be important for supply and demand. “On the supply side, we foresee intermittent interruptions to vehicle assembly and parts production worldwide,” said CBB, adding that the issue should persist until there has been more immunization and the health of the people involved in making cars and parts has improved.
On demand, CBB said consumer confidence and the level that they perceive as safe to leave their home and shop for a new or used vehicle is also important. “Currently, with various restrictions nationally, as well as leaders encouraging Canadians to stay home, this is not expected to set the stage for a strong start to retail sales for 2021,” said CBB.
On the plus side, consumer confidence has climbed since news of the vaccine was released, with the Bloomberg-Nanos Index showing confidence up five percentage points in the past four weeks. That is certainly better than stagnation or a decline.
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