TORONTO and MARKHAM, Ontario -

Canadian Black Book and TRADER Corp. each generated data and information this week aimed at uncovering just how significant the impact the COVID-19 pandemic has been on the country’s automotive wholesale and retail segments.

The results from both firms showed dramatic declines, especially with many auctions and dealerships forced to cease activities as authorities try to contain the disease spread.

Beginning first with the information from Canadian Black Book, the company surveyed its network of automotive retail clients across Canada to better understand the impacts of COVID-19 on auto retailing domestically. Analysts tabulated results from the 266 surveys completed between April 6 and 14.

CBB discovered the most significant numbers, themes and trends involved estimated percentage loss of business due to the COVID-19 outbreak. 

Analysts indicated one-third of dealers say that they have seen a drop in their overall business to the tune of 50% due to the pandemic. Even more alarming, Canadian Black Book reported that another full one-third of respondents declare they have witnessed a business decline of 75%. 

On top of those trends, CBB noted almost the last third (28%) are reporting over 75% loss of business.

“These numbers are staggering, to say the least.  It is hard to imagine how these dealers will weather the storm, but we know they are resilient and will do just that,” said Brian Murphy, vice president of research and editorial at Canadian Black Book.

“The silver lining in this is that we know this is temporary,” Murphy continued in a news release. “There will be pain, but also a lot of learnings will come out of this that will make dealers more versatile and ready for adversity.”   

The CBB survey also showed that 60% of dealer respondents from across the country have sales operations fully closed as a direct result of COVID-19.  Similarly, 36.5% revealed that even their service operations are closed.

From those who are experiencing closures, when asked how long they expect these closures to continue, Canadian Black Book discovered most respondents (53%) say they don’t know.  Of that same group of participants, 21% believe the closures to last one month and 15.5% feel this will go on longer, lasting two months. 

The survey went on to reveal that 27% of respondents have encountered vehicle supply shortages related to COVID-19.  Canadian Black Book expects that this statistic will increase during the next few months “as the ripple effect of global supply chain disruption is fully felt.”

Analysts insisted the COVID-19 outbreak has certainly crippled consumer confidence in general and specific to the auto sector in Canada.  The vast majority of dealer respondents (86%) have suggested that their customers have expressed concern about selling and/or buying vehicles due to the virus. 

“This has dealers across Canada considering strategies to inject some demand into the market,” Canadian Black Book said, while adding that when asked if they had considered offering special payment options for customers in a financial situation that have been affected by COVID-19, 67% of dealerships responded yes.

Analysts closed by saying their survey asked an open-ended question to get comments from dealers about changes made to their business as a response. The answers included:

“Laid off all staff and managers.”

“We have implemented a locked door policy where customers are screened before being granted access to the building.”

“All customer interactions are by phone and email only.” 

Canadian Black Book mentioned another common theme in the dealer remarks were changes to “cleaning practices” and “complete sanitization of premises and vehicles.”

“Overall, there were a wide variety of comments,” analysts said.

CBB said it expects to conduct this survey again in the near future to get an updated look at how dealers are faring and reacting to the COVID-19 crisis across Canada. 

TRADER insights

Nuno Loureiro, director of business intelligence at autoTRADER.ca, shared an array of industry findings with Auto Remarketing Canada.

After a strong sales performance in February and the early part of March, TRADER Corp. acknowledged the Canadian automotive industry is starting to feel the market disruption caused by the COVID-19 pandemic. Despite the projected downturn from automakers and temporary dealership closures in some parts of the country, newly released data from the company’s automotive marketplace points to a modest impact to Canadian auto pricing through the early days of COVID-19.

According to the autoTRADER.ca Price Index, which tracks Canadian auto pricing trends month-over-month and year-over-year from more than 400,000 vehicle listings, Loureiro determined the average new- and used-vehicle prices from late February to March experienced a moderate decline.

“While past data has indicated used-vehicle prices usually see a lift in Springtime, this decrease — although limited — could signify the impact of COVID-19 on traditional market patterns, and further changes as conditions evolve,” Loureiro said in a message sent to Auto Remarketing Canada.

Other data highlights from TRADER Corp. included:

• North American vehicles see a decrease month-over-month following a period of steady growth (New vehicles experienced a 0.8% drop, while used vehicles experienced a 2.9% drop month-over-month)

• Average prices for new trucks and sedans see first month-over-month decrease since September 2019 (down 1.2% and 0.3%, respectively)

• Used SUVs and trucks prices are down 0.9% month-over-month, while prices for sedans remain flat and continue to be the most economical body type on the market