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New-Vehicle Sales Soar in November; Used Prices Remain Stable

Looking back at November, Canadian new-vehicle sales numbers soared, while used prices continued to rise.

According to data from RVI Group, used-car prices this past month climbed by 2.3 percent from October, and 3 percent year-over-year.

On the other hand, the ADESA Canada Used Vehicle Price Index was down this past month, reversing the majority of October's gain. According to ADESA's data - powered by ALG Canada - wholesale prices fell on average by about .7 percent from October.

And price movements were down for all segments in the lanes this past month, as well.

First, according to the report, the midsize SUV segment had the largest declines, falling by 14.2 percent ($2,272).

"Very few midsize SUV's are sold each month, and this reversed a dramatic increase in prices seen in October," officials shared.

Moving along to wrap up the other segments that saw major declines in November, the mid compact segment fell by 7.8 percent ($483), fullsize pickups declined 7.0 percent ($1,059) and midsize cars dropped 6.1 percent ($523).

Highlighting two of the more moderate changes, compact SUVs and minivans declined by 3.8 percent ($428) and 3.4 percent ($249), respectively.

Looking ahead to the next couple of years, RVI officials shared that they expect used-car prices (seasonally adjusted; two- to five-year-old vehicles) to show year-over-year decreases starting in 2015.

"Our exchange rate forecast shows a strong Canadian dollar, resulting in downward pressure on used-car prices through 2017," officials added.

And as for used inventory, which remains tight as we approach the new year, RVI's used-vehicle stock index is expected to remain flat in 2013 on a year-over-year basis, but then show increases in 2017.

"Although remaining strong, used-car prices will begin to soften in 2015 due to increasing new car competition and higher used-vehicle supply," RVI officials said.

And RVI offered a prediction for the coming year, as well.

During a recent interview, Rene Abdalah, vice president of RVI Group, told Auto Remarketing Canada, "We believe used car prices will soften in the early part of 2013 as supply begins to increase. Dealers should expect to pay a little less for vehicles at wholesale."

Meanwhile, ALG provided Auto Remarketing Canada with some information regarding used-vehicle prices in relation to vehicle age. ALG officials explained, "The strength in used-vehicle prices is being led by three- to four-year-old models which will be in short supply for the next three years."

This could push prices up for this group of vehicles.

On the other hand, an above average supply of units from five to seven years old will be available over the next two years placing downward pressure on pricing for this group, according to ALG.

And for dealers looking for one- to two-year-old models, they may begin to see inventory loosening up and prices softening by 2014.

"With fleet sales gaining momentum, the supply of one- to two-year-oldyear old models will expand to above average levels starting in 2014," officials shared.

New-Vehicle Sales Boosted by Brand Performance

Moving along to highlight new-car sales this past November, numbers increased by 3.8 percent from year-earlier levels, "buoyed by standout performances from Audi, Hyundai, Kia, Porsche, smart and Subaru," officials explained in the report from ADESA.

As of the end of November, year-to-date, overall sales were up 6.5 percent to a total of 1,566,744 vehicles sold, according to the report.

"November's sales continued the nearly unbroken trend in 2012 where monthly sales have continued to be stronger than the five year historical average for the month," the analysis concluded.

Taking a look at RVI data, the company gave a positive prediction for the next few years in the new market - officials shared they expect new-vehicle sales to remain over 1.6 million for the next five years, the company said.