TORONTO -

Though average used-vehicle profitability among Canada’s franchised dealers has ticked modestly downward in recent months, this is not necessarily cause for concern.

In fact, the fluctuation in profits on the used side has been rather stable compared to new-vehicle profitability, according to J.D. Power and Associates.

Looking at the 12 months of data included in the firm’s Automotive Market Metrics analysis (February 2011 through January 2012), average dealer gross profit per vehicle has remained in the approximate $1,400-to-$1,600 range, even though they declined the last three months in the data set.

The ups-and-downs in new-car profits, however, have been more dramatic. They swooned downward from around $1,300 in May 2011 to less than $1,000 by August, only to climb back over $1,200 by late autumn. Then new-car profits took a $200 dip between November and December.

J.D. Power generated this data via its Power Information Network, where more than 800 franchised dealers in Canada voluntarily provided transactional data.

“You can actually see that the price of used cars is fairly stable over time where new cars actually fluctuate quite a bit,” Brian Murphy, senior manager for the Power Information Network, told Auto Remarketing Canada this morning.  “That has to do with some manufacturer sell-down period with the previous model year, and during that period of time, typically profitability gets squeezed (on the new-car side).

“If anything, this chart shows how the used-car operation is such an important, stable, reliable source of revenue for the store, whereas the new-car part of the shop can fluctuate quite a lot,” he added.

“It also gives the retailer an idea of, ‘OK, well I know what my average profit on a used car is, so how do I compare to the national average?’ It can tell (a dealer), ‘Am I keeping too much margin or not enough margin?’” Murphy continued.

Later this month, J.D. Power will release a fresh set of data updated through the end of February. Stay tuned to Auto Remarketing Canada for updated stories on the latest data sets from the firm.

Smartphone Usage in Canada

Murphy and automotive account analyst J.D. Ney also talked with Auto Remarketing Canada in great detail about some of the auto shopping trends being spotted in the smartphone arena in Canada.

According to their analysis, about three-fifths (58 percent) of Canadian new-vehicle shoppers have a smartphone. While they did not yet have any specific numbers regarding Canadian used-car shoppers, Ney and Murphy did share some insight into important reminders for dealers and automakers when it comes to reaching these mobile-savvy shoppers.

Looking at the numbers in more details, 92 percent of these smartphone-using new-vehicle shoppers tap into the Web through these devices. Half of that crowd accesses the Internet frequently each day, according to J.D. Power.

Additionally, almost a quarter (22 percent) of shoppers accessing the Web through their smartphones check out auto websites. Among these auto site visitors, half check out franchised dealer sites, and 70 percent go to automaker sites.

That said, there is still major room for growth for the auto business in Canada.

The proportion of smartphone users claiming to use their device for social media (52 percent) is more than double the proportion who use it for going to auto websites (22 percent).

What’s more, J.D. Power found that half of smartphone users download applications. However, just 9 percent have downloaded an auto app.

“From what our research showed us, smartphone owners haven’t quite picked up the automotive industry as much as they have some of the other social-media applications,” Ney shared, noting that half of smartphone users are already tapping into mediums like Facebook and Twitter on their phones.

“To be able to leverage that space that smartphone users are already using is important," Ney added.

So how can dealers and automakers take greater advantage and drive more mobile traffic? Murphy emphasizes the importance of going local.

“You really have to find the right buy. You have to find something that’s very geographically specific,” he explained. “There’s not too much value in you attracting somebody from the other side of the country. You want to attract someone who lives in your geography.

“Typically things like local weather — those sites that are very geo-targeted — those are probably the best,” Murphy continued. As for best practices, he also stressed the importance of retailers keeping mobile sites and traditional sites updated.

“It’s  not doing anybody any good if you go on the site today and you’ve got information about some winter special,” Murphy noted. This is especially important on the used-car side, as well, he said, where “each car is unique (and) inventory turns over so quickly.”

He went on to emphasize the importance in finding “a fool-proof way to make sure the inventory is updated.”