By: Brian Murphy - Vice President of Research & Analytics at CBB

The years 2017-2018 were great big years for the Canadian auto industry, the first and second largest years ever for car sales.  In 2017 Canada finally broke the barrier and sold two million vehicles.  While 2019 stayed virtually flat, the record years now seem like ancient history, at least for now.  The year 2020 began innocently enough, much the same as last year.  It was shaping up to be a year with a probable (small) decline in sales and some elevated risk of U.S. recession.   

However, everything changed here, and the around the globe at the beginning of February. Due to COVID-19 economies began to fall, borders were closed, joblessness surged, governments began scrambling to find relief and obviously the auto sector was hit hard.  Plants making parts and those assembling cars closed temporarily.    

In January 2020, we were witness to near all-time record high retained wholesale values for two to six year old vehicles, as illustrated in the Used Vehicle Value Retention Index (graph below). Soon after, once COVID took root, the CBB Index began a sharp and deep drop in a way never before seen.

Subsequently, come June 2020, after 3 straight months of record wholesale value losses the market began to rebound. Putting this into perspective, and looking back to previous months, the wholesale market price prices fell on average 0.99% in March, 3.58% in April, just over 3% for May, and June was unchanged.  The total decline from January to June was 7.2%, in an index that generally moves by tenths of a point per month.

In July, actual wholesale values rose by a remarkable 3.20 CBB Index points. August saw a new record monthly gain of 3.73 Index points. This is the largest increase in the history of the Index and can be attributed largely to pent-up demand held back from the previous months. 

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