ADESA Canada: Used Values Unseasonably Low
MISSISSAUGA, Ontario — January marked the fourth straight month of sequential declines for the ADESA Canada Used Vehicle Price Index, as the anticipated seasonal upswing in values never came to fruition. Resale prices were pushed downward by dealers' excess inventory of both new and used vehicles, officials pointed out.
Specifically, ADESA's data — powered by ALG Canada — indicated that January's index dropped 1 percentage point from the previous month, seasonally adjusted.
"Overall auction values were flat between December and January, and the expected seasonal improvement did not materialize," officials explained.
"Another consecutive monthly decline in resale prices can be attributed to high new and used vehicle inventory on dealer lots, which they are finding difficult to offload due to both the strengthening of the Canadian dollar (driving consumers to the U.S.) and the diminishing purchasing power of the Canadian consumer (driven by increases in the average debt load of the Canadian consumer)," they continued.
Though the unemployment rate in Canada fell to 8.3 percent, officials still considered this a high level that does not alleviate the burden on Canadian consumers.
Officials added: "CY2010 holds for many OEMs a year of heightened levels of off-lease vehicles which will continue to drive home the necessity and value for out-of-the-box thinking when remarketing off-lease vehicles."
Looking at individual segments, officials pointed to the impact of fuel costs, which climbed to 101.2c/liter in January, up from 96.5 c/liter in December. This has lead to divergent value trends across the wholesale segments, officials noted.
For instance, less fuel-efficient segments like midsize SUVs, whose values dropped 3.1 percent, and full-size pickups (down 1.5 percent) saw some of the heavier declines.
Meanwhile, the mid compact segment showed the strongest upswing with a 2.7-percent incline.
Continuing on, SUVs were up 1.6 percent, minivan values jumped 1.2 percent and midsize cars increased modestly (0.2 percent).