Used vehicles are hot
commodities these days, as local buyers take advantage of low interest
rates and more American dealers are cross-border shopping to take
advantage of the high-valued U.S. dollar, industry officials say.
"The demand for used vehicles has just been tremendous," Dilawri Group CEO Ashok Dilawri said in an interview, adding it's the strongest he's seen in at least five or six years.
He estimated sales of used vehicles are running at least
five to 10 per cent ahead of last year for his group of seven
dealerships, and that the increase would be even greater if they had
more pre-owned vehicles to sell.
"The supply is so limited, because what is happening is there are buyers from the south who are snapping up everything you put in the marketplace," Dilawri said.
He said the demand for used vehicles is so strong south of the border, U.S. dealers who previously wouldn't look at anything that was more than three years old are now purchasing vehicles from local auction houses that are 10 or 12 years old.
"Especially (pickup) trucks and SUVs (sport utility vehicles). Everybody is looking for them, because the demand is so high on those things."
A Scotiabank report released Friday said sales of pre-owned vehicles through Canadian dealerships are at their highest level in nearly a decade, and are expected to top the previous annual record of three million units set in 2011.
It said while Canadians are being drawn to the dealerships by low interest rates, which make car loans more affordable, the weak Canadian dollar has also made cross-border shopping a highly lucrative option for American auto dealers.
It said Statistics Canada data shows exports of used vehicles to the U.S. began to take off once the loonie fell below 90 cents (US). After more than doubling in the first six months of 2015, they soared by a staggering 155 per cent (year over year) during the July-August period when the loonie approached 76 cents (US), its lowest level in more than a decade.
The bank said that after the first eight months of 2015, nearly 23,000 Canadian vehicles had been exported to the United States, compared with 15,600 in all of 2014.
A local spokesman for Adesa Canada, which sells used vehicles online and through a network of auction houses across the country, said U.S. dealers have purchased at least 25 per cent of the roughly 55,000 vehicles it has been selling each month this year.
"Last week, we had a buyer from Texas who bought almost 500 units in two days," Gregg Maidment, Adesa's vice-president and general manager for Western Canada, said in an interview.
Maidment said while U.S. dealers were initially interested mainly in pickup trucks and SUVs, "Now it's gone across the board."
He noted the same thing happened in the early part of the new millennium, when the loonie was worth even less than it is today. But this time it's happening on an even bigger scale, because U.S. and other foreign dealers can now make their Canadian purchases online.
"Most of it is now done over the Internet. They can just click and buy the vehicle they need and have it shipped to them," Maidment said, adding Adesa has 20,000 buyers a day from 105 countries bidding on vehicles through its website.
"Because it's a worldwide buyer base now, people are able to, in many cases, get more than they expected for their car because it's live, competitive bidding," he added.
Maidment noted while Adesa sells used vehicles on behalf of individual car owners, it doesn't sell to the public. He also noted it's mainly dealers and dealer groups who are buying vehicles in Canada.
"You're not seeing (U.S.) consumers coming up here to look for a car."
The general manager for one local used-car dealership, Auto Gallery of Canada, said it's also been approached this year by American dealers looking to buy some of its pre-owned vehicles.
"And it doesn't matter if it's a small car or a truck. They don't care," Harvey Brennan said. "But we don't do that (sell to U.S. dealers), because we want to keep that business here."
The president of Manitoba's largest dealership group -- Birchwood Automotive Group -- said Birchwood hasn't been approached yet by any U.S. dealers. But Steve Chipman said Birchwood is always looking for ways to grow its sales, so it's contacting some U.S. dealers to see if they're interested in buying some of its pre-owned stock.
Because used trucks and SUVs are getting hard to come by, Birchwood Chevrolet took out a full-page newspaper advertisement last Friday stating, "We want your truck!" and "We will pay you more for your vehicle!"
Asked if people are responding, Chipman said, "They're starting to. There are people phoning, and we've taken some trades in and sold (them) some new vehicles."
murray.mcneill@freepress.mb.ca
"The demand for used vehicles has just been tremendous," Dilawri Group CEO Ashok Dilawri said in an interview, adding it's the strongest he's seen in at least five or six years.
"The supply is so limited, because what is happening is there are buyers from the south who are snapping up everything you put in the marketplace," Dilawri said.
He said the demand for used vehicles is so strong south of the border, U.S. dealers who previously wouldn't look at anything that was more than three years old are now purchasing vehicles from local auction houses that are 10 or 12 years old.
"Especially (pickup) trucks and SUVs (sport utility vehicles). Everybody is looking for them, because the demand is so high on those things."
A Scotiabank report released Friday said sales of pre-owned vehicles through Canadian dealerships are at their highest level in nearly a decade, and are expected to top the previous annual record of three million units set in 2011.
It said while Canadians are being drawn to the dealerships by low interest rates, which make car loans more affordable, the weak Canadian dollar has also made cross-border shopping a highly lucrative option for American auto dealers.
It said Statistics Canada data shows exports of used vehicles to the U.S. began to take off once the loonie fell below 90 cents (US). After more than doubling in the first six months of 2015, they soared by a staggering 155 per cent (year over year) during the July-August period when the loonie approached 76 cents (US), its lowest level in more than a decade.
The bank said that after the first eight months of 2015, nearly 23,000 Canadian vehicles had been exported to the United States, compared with 15,600 in all of 2014.
A local spokesman for Adesa Canada, which sells used vehicles online and through a network of auction houses across the country, said U.S. dealers have purchased at least 25 per cent of the roughly 55,000 vehicles it has been selling each month this year.
"Last week, we had a buyer from Texas who bought almost 500 units in two days," Gregg Maidment, Adesa's vice-president and general manager for Western Canada, said in an interview.
Maidment said while U.S. dealers were initially interested mainly in pickup trucks and SUVs, "Now it's gone across the board."
He noted the same thing happened in the early part of the new millennium, when the loonie was worth even less than it is today. But this time it's happening on an even bigger scale, because U.S. and other foreign dealers can now make their Canadian purchases online.
"Most of it is now done over the Internet. They can just click and buy the vehicle they need and have it shipped to them," Maidment said, adding Adesa has 20,000 buyers a day from 105 countries bidding on vehicles through its website.
"Because it's a worldwide buyer base now, people are able to, in many cases, get more than they expected for their car because it's live, competitive bidding," he added.
Maidment noted while Adesa sells used vehicles on behalf of individual car owners, it doesn't sell to the public. He also noted it's mainly dealers and dealer groups who are buying vehicles in Canada.
"You're not seeing (U.S.) consumers coming up here to look for a car."
The general manager for one local used-car dealership, Auto Gallery of Canada, said it's also been approached this year by American dealers looking to buy some of its pre-owned vehicles.
"And it doesn't matter if it's a small car or a truck. They don't care," Harvey Brennan said. "But we don't do that (sell to U.S. dealers), because we want to keep that business here."
The president of Manitoba's largest dealership group -- Birchwood Automotive Group -- said Birchwood hasn't been approached yet by any U.S. dealers. But Steve Chipman said Birchwood is always looking for ways to grow its sales, so it's contacting some U.S. dealers to see if they're interested in buying some of its pre-owned stock.
Because used trucks and SUVs are getting hard to come by, Birchwood Chevrolet took out a full-page newspaper advertisement last Friday stating, "We want your truck!" and "We will pay you more for your vehicle!"
Asked if people are responding, Chipman said, "They're starting to. There are people phoning, and we've taken some trades in and sold (them) some new vehicles."
murray.mcneill@freepress.mb.ca
Republished from the Winnipeg Free Press print edition October 21, 2015 B6
New interest in used vehicles
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