As you might expect the month of May was a very challenging month for many in the auto industry across Canada. It was no exception when it came to the trending of values for our index. The Canadian Black Book Used Vehicle Values Index has seen declines in recent months that were bigger than ever thought possible in the Canadian auto sector.
The CBB Index for 2-6 year old vehicles fell by 5.3 points in May 2020 and a further 3.2 points from for April. This puts the index down 7.8 points just from March of this year alone. It is our expectation that there are approximately ten more points of potential decline before values begin to trend upwards towards the end of 2020.
Minivans led the way down from the same month last year with an 11.6 point decline, followed closely by Sporty Car at 11.2 and Small Pickup with a loss of 8.4 points.
Looking back to April and comparing the tallies to May 2020, we see the Sporty Cars segment faring the worst, with a decline of 5.0 points, which is an exceptional decline for just one month. The Sporty Cars class should be doing well this time of year, however the market is not following the conventional seasonality given the crisis at hand.
The very popular Mid-Size Crossover segment fell by 4.6 points and Mid-Size car posted a loss of 3.8 points to highlight two other adversely impacted segments for May.
Looking back to May of 2019, the Subcompact Car segment has gained a remarkable 7.6 points since that time. Full Size Vans had gained 4.2 index points in the last 12 months. Our outlook for this segment is that it will be under pressure as some businesses shrink their fleets at a time when it will be a bit more difficult to find a buyer for a business-only type of van, due to the uncertain economic outlook.
Compared to last month, there really was only one segment that went up, that was the Prestige Luxury Car segment and it climbed by a very thin 0.2 points, essentially meaning it was almost flat.
The auto industry, like so many other businesses has a very strong cyclical nature to it. We fully expect that once some of the extra supply we are expecting over the next 5-6 months has run through the market and the economy starts to strengthen that prices will start to rebound. Until that time, it is a buyers market and there are deals to be had out there in the lanes.