Canadian Wholesale Prices Drop In April; Mixed Expectations for Rest of 2013
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MARKHAM, Ontario –
Taking a look back at April, reports are in that show what is perhaps good news for dealers — wholesale prices are dropping this spring in Canada.
Used supply has been tight, ramping up auction prices throughout the country. But in April, the ADESA Canada Used Vehicle Price Index shows that after being adjusted for seasonality, wholesale prices fell on average by about 0.4 percent month-over-month.
Over at RVI Group, its findings were much the same; Canadian wholesale values (seasonally adjusted; two- to five-year-old vehicles) went down 3.3 percent when compared to March.
Though auction rates are falling as the season progresses, wholesale prices are still up 3.4 percent on a year-over-year basis, according to RVI.
The firm also explained that the larger segments such as minivans (falling 7.2 percent month-over-month) and full-size pickups (dropping 4.9 percent month-over-month) showed declines beyond the market average.
On the other hand, as weather heats up, the smaller vehicle segments, such as compact (up 0.6 percent) and subcompacts (up 0.2 percent) showed small increases from March to April.
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In ALG’s analysis of the ADESA Canada Used Vehicle Price Index results updates for April, the company pointed out a few significant price changes, as well.
According to the Index, price movements were mostly negative in April.
Miinivans fell 3.4 percent ($325), fullsize pickups dropped 2.4 percent ($442), compact SUVs lost 2.2 percent ($279), and midsize SUVs were down 1.8 percent ($285), ALG reported.
On the other hand, Mid-compact cars rose 3.8 percent ($289), while midsize cars were up slightly at 0.6 percent ($65).
Though prices fell as the spring car buying season was wrapping up this April, RVI vice president Rene Abdalah told Auto Remarketing Canada that Q2 may bring different news.
"We expect wholesale prices to move upward in the second quarter of 2013 from the 1st quarter. Our forecast shows lower gas prices in the 2nd quarter, which will have a positive impact on our forecast," Abdalah said.
That said, as used-vehicle supply continues to slowly improve, the long-term outlook may bring a reprieve in the lanes to dealers and buyers.
"For the remainder of 2013 though, we expect used-car prices to decline. Increasing used-vehicle supply and exchange rates will have negative impacts on the Canadian used-car market," Abdalah concluded.
Sarah Rubenoff can be reached at [email protected]. Continue the conversation with Auto Remarketing Canada on LinkedIn and Twitter.
