J.D. Power: Canadian Purchase Intent Moves Toward New-Car Side
If the latest Automotive Analyst Note from J.D. Power and Associates’ Canadian Automotive Practice is any indication, the Canadian new-vehicle market could steal some traction from the used-car side in the next year.
The firm indicated that for shoppers planning on buying within 12 months, just over 60 percent intend to purchase new. This is up 8 percentage points from 2011. Meanwhile, the proportion of intenders planning to go used is at 27 percent, versus 35 percent last year.
“When it comes to acquiring a vehicle in the next 12 months, purchase intent in Canada is changing,” wrote J.D. Power research intern Virginia Connell, who authored the report. “While the percentage of vehicle owners intending to lease a new vehicle has remained constant year-over-year at 11 percent, there has been a significant shift from intention to purchase used to purchasing new, during the same time frame.”
Connell also points out that the proportion of shoppers who changed their mind on what car to buy climbed 8 percent from 2011.
So what’s pushing the gains for the new-car market? According to the analysis, it’s the Manitoba, Saskatchewan and Alberta shoppers.
Interestingly enough, the analysis indicates that even though the average vehicle price in the Prairies ($36,516) — as the provinces are called — tops the key Canadian markets, new-vehicle purchase intent has skyrocketed. Specifically, Connell notes that “there is a full 10-percent increase in these provinces to purchase a new vehicle (63 percent), the highest in Canada.”
She continued: “Forward ownership costs are not as strong a concern in the Prairies as in other regions. Vehicle owners indicating the cost of service work was ‘quite important’ or ‘very important’ to consider in their vehicle purchase decision is 52 percent in these provinces, the lowest proportion in Canada.
“These vehicle owners are also most likely to indicate ‘considering a more expensive vehicle’ as the reason for changing their mind while shopping,” she added.
Conversely, the Prairies had the lowest rate for “trying to spend less than originally planned,” being cited as a reason for a change in purchase decision.