Last week the Bank of Canada cut its benchmark interest rate by 25 basis points, the first cut since the beginning of the pandemic in 2020. In light of this, we at DAC thought it would be timely to take a look at consumer price index data from key parts of the automotive industry. For April 2024 the picture continued to be one of increases, albeit with one glaring exception. Leading the gains was insurance premiums, the CPI for which increased 6.8% compared to April 2023. Gasoline, not far off, also saw a 6.1% increase. In the critical maintenance category, prices increased 4.2% with parts also up 2.9%, showing an automotive aftermarket that continues to see price gains.
The picture does change when looking at vehicle prices, however, with the CPI for the purchase of new passenger vehicles up a modest 1.4% compared to April 2023. Used passenger vehicles, which had experienced sharp price growth during the semiconductor-related shortages, saw CPI decline 2.3% as of April 2024. “While consumers have seen some easing in the price growth for vehicles themselves, the costs in the aftermarket as well as gas and insurance continued to climb” commented Andrew King, Managing Partner at DAC. He continued, “Hopefully price pressures will continue to ameliorate, and interest rates fall further, as the automotive market enters a somewhat unsteady period.”
Azarov, D. (2024, June 12). Auto industry prices continue to grow as rate cutting begins. DesRosiers Automotive Reports, DesRosiers Automotive Consultants