Canadian CPO Sales Appear Strong; DesRosiers Examines Vehicle Age Trends
Bryan Leaitch, the manager of certified pre-owned at Mazda Canada, has spotted one particular trend in company’s relatively new program that has helped spur dealer engagement.
“We have noticed that the gross profit per unit for our CPO units versus non-CPO units has increased steadily since our program launch, which has resulted in increased active dealer participation in the program,” Leaitch said.
“We look to continue this momentum going forward in order to improve our dealer network profitability,” he continued. “In addition to increased gross profit per unit, dealers are focusing more on inventory turn rate, which will further help to increase their profitability.”
Just seven months into its CPO program, Mazda has moved 2,338 certified units in Canada so far this year, and sold 341 in September.
But it’s not just Mazda that is making strides in CPO this year.
At Honda Canada, both the Honda and Acura brands are up double-digit percentages in year-to-date CPO sales.
Starting with the Honda division, it moved 1,790 certified vehicles last month, compared to 1,539 CPO sales in September 2011. Year-to-date, its sales have climbed from 14,860 through three quarters of 2011 to 16,840 in the same time-frame this year.
“Honda CPO sales continue its successful sales year. Currently we are 13.3 percent up in CPO sales compared to the same period last year. We are proud of our dealer network for achieving this level of growth and for elevating our Honda certified brand,” said Todd Fowler, Honda Canada’s manager of used-vehicle operations.
As for the Acura brand, it sold 267 CPO units in September, versus 246 the same month last year. Through nine months, it has moved 2,777 certified units, compared to 1,999 in the same period of 2011.
“Acura CPO sales continue to amaze. We are currently 38.9 percent up in CPO sales compared to the same period last year,” Fowler said. “We are very proud of our dealer network for their dedication in both promoting Acura and our certified brand.”
Toyota sold 2,016 certified vehicles in September, up from 1,920 CPO sales in September 2011. This represented its strongest September on record, the company noted. Through nine months, it has moved 19,385 units, up from 17,914 certified sales in the year-ago period.
Over at Audi, its CPO sales in Canada fell from 369 in September 2011 to 307 in the most recent month. However, year-to-date sales are up 2.5 percent at 3,218 units through nine months.
“We are experiencing some significant challenges with regards to overall used-vehicle supply. Dealer upstream engagement is at an all-time high and Audi dealers are much more adept at sourcing used vehicles from past non-lease sales volume as a result of this supply dynamic,” said Jonathan Breton, Audi Canada’s manager of CPO and corporate sales
“To help continue the momentum in CPO sales we have seen this year, targeted trade-in incentives will be used as part of a direct marketing campaign in an effort to support bolstering dealer CPO inventory,” he added.
Volkswagen Canada moved 1,281 CPO units in September, compared to 957 in the same month of 2011. Year-to-date, it has sold 10,560 certified vehicles, compared to 8,660 through nine months of 2011.
For Volvo Canada, September certified sales were at 102 units, down from 150 in September 2011. Year-to-date, it has sold 963 CPO units, up from 952 in the same period of 2011.
“Volvo Canada’s industry-leading CPO program continues to appeal to consumers in search of a luxury vehicle offering superb value balanced with peace of mind normally reserved for buying new,” said Emanuel Lichtinshtein, national fleet sales, CPO & remarketing manager
Hyundai Auto Canada Corp. moved 876 certified units in September for a 50-percent year-over-year gain, and moved 9,259 CPO vehicles through three quarters for a dramatic 348.4-percent hike.
At Mercedes-Benz Canada, the Mercedes-Benz Pre-Owned division had its strongest September on record, selling 1,367 vehicles. Year-to-date, it has increased sales 12.2 percent with 11,202 units sold.
Aging Vehicle Fleet
Elsewhere in the Canadian used-car market, DesRosiers Automotive Consultants released a report Thursday morning detailing statistics on Canadian light-vehicle registrations.
While the number on late-model vehicles on Canadian roads has slid modestly in recent years, the crop of cars in the eight- to 12-year-old class has surged dramatically, as Canada’s car fleet has become increasingly older and more populated.
The firm found that between 2007 and 2011, overall vehicle registrations climbed nearly 10 percent, hitting 22.2 million last year. That number is likely to climb another 1.9 percent this year and continue growing for years to come, DesRosiers projected.
The increase in the population of eight- to 12-year-old units has been even more dramatic, climbing 23 percent since 2007. Last year, there were more than 6 million vehicles in this age bracket registered in Canada.
What’s more, this age group is taking up a more sizeable chunk of the overall vehicle market.
“Due to the lower scrappage rates and the improved durability of newer vehicles, the average age of a light vehicle in Canada has increased by 0.31 years since 2007,” the firm explained.
“Furthermore, the proportion of vehicles between eight to 12 years old relative to the total vehicle fleet has increased by 3.1 percentage points (or 11.9 percent) since 2007,” it added. “This trend is expected to continue in the near future and will stand to benefit businesses that sell or service older vehicles.”
Meanwhile, the data provided by DesRosiers indicated that there were just over 4 million units in the one- to three-year-old age bracket in 2007, but that number dropped slightly to right at 4 million for 2011.
The number of four- to five-year-old units increased to more than 3 million units, and the population of six- to seven-year-old units jumped to about 3 million.
There are also more vehicles that are older than 12 years as that population continues to exceed 5 million units.