Welcome to Canadian Black Book's - The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:
By Brian Murphy, VP Research & Analytics, Canadian Black Book
Each year at Canadian Black Book (CBB) our team drives over one hundred and fifty of the vast assortment of new vehicles that are sold in the Canadian market. That is almost half of all the new models available for sale in this country. We cover cars, trucks, SUVs and some light commercial vehicles. Give us two years time and we will have driven at least one example of each new vehicle available for sale in the Great White North. As far as we know there isn’t anyone out there in the automotive business in Canada who drives as many vehicles as our CBB team does. Certainly, the odd time one slips by that we don’t manage to get some seat time in, but we just about have it all covered. So why do we invest so much time behind all these different steering wheels? Well, its all about doing our job and doing it thoroughly.
Photo by ARAS Imaging (www.arasimaging.com)
The drive time dedicated to generating first hand evaluations of the many product offerings that are out there. We need to stay current with the all the products, their pricing, packaging and features. Admittedly, this is one of the most enjoyable aspects of what we do. However, there is more too it than just an addiction to the new car smell.
Our core business is focused on forecasting future residual values for leasing and publishing a guide for wholesale vehicle values as they stand today. Often, we also work on “special projects” with a vehicle manufacturer on a still top-secret future model that may be many years away. It is not unusual for us to see a vehicle almost a year before it would be seen at an autoshow, of course that is all we can say about that. Our first-hand knowledge of vehicle offerings and how competitive each is within its respective segment are critical for us to be able to do our job. It also makes us very helpful consultants on product related matters for our clients.
To elaborate further, we are making the effort to thoroughly understand if a given model, especially if the vehicle is an all new product offering or a significantly updated/facelifted one, is competitive. If a given vehicle at the time of launch is not competitive in the market our outlook is that will negatively affect its residual value when the vehicle comes back to market in 3-4 years as an off-lease vehicle. By competitive we mean how does it stack up with features and content compared to its opponents. A less competitive vehicle will likely need more incentives and be less attractive when it comes to remarkeing and sales in the used market. Of course, vehicles, unlike fine wine seldom have stronger value performance as time marches on, some collector cars aside.
Evaluating the exterior and interior design is certainly part our evaluation. This is, of course, highly subjective. However, I feel very confident that if our entire team dislikes a particular design or likes a particular design this will be indicative of how the mass market will likely view this car in the marketplace. When we are studying the interior we are very conscious of the quality of the materials used, the size of the screen that is married to the infotainment system and how well the infotainment system is integrated with vehicle functions and hand held devices to name a few examples. Not supporting AppleCar play or Android Auto is a big red flag for our team. When that vehicles comes back to market as a used unit the market will deduct some value for that lack of hand held device support.
Understanding totally new features are also a key reason for our unrelenting enthusiasm for understanding new products. As you might have noticed manufacturers are rolling out new features at a rapid rate. It seems every brand has a new widget for safety, comfort, convenience and so on. Many of these features are admittedly interesting and helpful, but how will they age? As you might expect some features may age rapidly to the point that they are worth very little if anything in 5 years time. It is somewhat similar to trends in consumer electronics. If you buy the newest and latest high-tech flat screen nano-bot TV in 5 years time you can probably get a bigger TV for a fraction of the price. TV’s actually age better than cars, don’t they?
One factor that we do note almost every time is that many new features are not at all intuitive. For retailers this underscores the importance of setting aside enough time to complete a proper delivery of the vehicle, as we as perhaps a follow up second delivery. We are certainly pulling out the owner’s manual many times to try to figure out what the button actually does. How does one switch off automatic high beams? I still don’t know. They certainly don’t work very well on one car I drove recently. Every time I turned a corner in the city it turned on the high beams much to the delight of pedestrians.
Driving 150 vehicles per year seems like a lot. To be fair the actual number is a bit higher. I didn’t count the vehicles in which we only go for a brief drive, often manufactures will provide a competitive vehicle for us to drive driving up the actual count a bit higher.
An unfortunate side affect of all our vehicle testing is that in our office all the neighbours all think we are car thieves but it just isn’t true. Officer, please let us explain ourselves! This is why we drive what we drive, to better understand the market and be better advisors to our valued clients.