STAMFORD, Conn. -

Frigid Canadian weather this winter has led to more than just mountains. The bitter conditions have had an impact on Canada’s used-car market at the start of 2011, as the frosty climate has chilled wholesale values, according to RVI Group.

Specifically, Canadian used-car prices in the first two weeks of January were down 1.5 percent from December, and the weather has been a major culprit, RVI vice president Rene Abdalah told Auto Remarketing this week.

While some of that will be offset, he stressed, the opening of 2011 has undoubtedly shown some wholesale weakness.

Such downward movement is a continuation of the sequential declines the Canadian used-car market experienced in December, when wholesale values dipped 1.7 percent month-over-month (after being seasonally adjusted).

Before December, April had been the last time that used values dipped sequentially. Moreover, December’s month-over-month softening was the heftiest in 12 months.

“Really, the exchange rate (caused this decline in December). You see it creeping up slowly and surely,” Abdalah noted, referring to the value of the Canadian dollar climbing and approaching parity with the U.S. dollar.

In December, the U.S.-Canadian exchange rate was 0.9921, RVI noted.

“It has a two-pronged effect,” he noted, referring to the increased value of the Canadian dollar.

First of all, when the value of the Canadian dollar increases, more Canadian dealers come down to the U.S. to buy vehicles, thus putting downward pressure on wholesale prices in Canada.

Second, a strengthening Canadian dollar leads to manufacturers in Canada boosting incentives. This move is designed to bring new-car prices down to the U.S. level.

This, again, pushes down on wholesale pricing.

The Canadian wholesale market was also downwardly impacted by rising fuel costs in December. Canada’s gas prices during the month rose to $1.10/liter, according to RVI.

Granted, wholesale prices during December did climb 8.1 percent on a year-over-year basis. However, this stems from weak comparables from 2009 when “conditions in (the economy of) Canada were weaker,” Abdalah suggested. December was a “rebound” from where Canada was in the prior-year period, he added.

Continuing on, RVI also offered some analysis on how various segments performed in the wholesale market.

Among volume segments, small SUVs (up 1.2 percent) were the only ones to show a sequential gain in December.

Midsize SUVs showed the strongest decline among volume segments, as their values were off 8.3 percent from November. While acknowledging that this is a rather small segment, Abdalah did point out that “gas prices have had a direct impact on this segment.”

On a year-over-year basis, compacts showed the most strength among the volume segments with a 17.5-percent uptick.

Explaining the rise in compacts’ values, these gains stem from the economic climate in Canada, “and you do have a good wave of products hitting the market” within this segment, Abdalah noted, referring to the new compact vehicle offerings that are making their way into the wholesale arena from the new side of the market.

Looking at a few other volume segments, minivan prices moved ahead 13.2 percent year-over-year and midsize sedans were up 11.3 percent. Full-size pickups showed the most modest year-over-year increase among volume segments (up 1.4 percent).