(Montréal) The boom in the automobile market seems to be showing signs of running out of steam, although this is preliminary and the prices of new vehicles continue to rise.
However, the December statistical report from the resale site AutoHebdo shows that the increase in the average price of new vehicles has been less pronounced for two months and that, in the case of North American cars, it has even experienced a drop for the first time in 20 months, i.e. since March 2021. Admittedly, the decline is modest, 0.6% in December compared to November and on an annual basis, it remains 6% higher than a year ago , but it is still the first improvement in a long time.
At the same time, the fall in the average price of used vehicles, which began last June, is undeniable and continued in December. The drop was then 1.2% compared to the previous month, but a used vehicle still cost 9% more, on average, than a year earlier.
Growing inventories
It is the strong demand in a context of tight supply that is keeping prices high, but the increase in inventories shows that the automotive sector is beginning to recover from stock shortages caused by the pandemic.
Thus, on the new vehicle side, inventories are up in all categories, although retailers are still far from having reached the levels of the first quarter of 2021. One category is an exception, namely light trucks, whose inventories exceed those of the beginning of 2021, and have been for a year.
On the side of used vehicles, buyers are starting to review the choice. Thus, the SUV inventory is now well above the level of two years ago, despite a slight drop in the last quarter of 2022. As for used cars, even if the inventory remains below that of it two years ago, it picked up again after a slight decline in the third quarter. This inventory had already started to rise in the first quarter of 2022. As for light trucks, the inventory fell slightly, but remains well above that of two years ago.
Quebec still among the cheapest
As for Canadian regional disparities, even though it is in Quebec that the average price of new and used vehicles has experienced the largest increases from one year to the next (respectively 21% for new and 14% for used), average prices remain the second lowest in the country ($55,660 and $33,551 respectively). Only the Atlantic provinces offer better prices.
As for new vehicles, it is in Alberta that we find the highest average price, that is $63,231, while British Columbia wins the prize for used vehicles, with an average price of $40,553.