Cost-cutting measures and easing interest rates are offering some financial relief for Canadians, according to the latest MNP Consumer Debt Index.

The index, which tracks perceptions of financial stability, has increased by four points from the previous quarter to reach 89, signalling growing optimism among Canadians regarding their personal finances.

On average, Canadians report having $155 more left over at the end of each month, with total monthly savings now averaging $937 — the highest figure in five years. Notably, the proportion of Canadians who say they are $200 or less away from insolvency has fallen to 42 per cent, the lowest since September 2018.

“While cost-saving behaviours and lower interest rates have positively impacted Canadians’ perceived financial well-being, a significant minority — close to four in 10 — still report being on the brink of insolvency, indicating they are struggling to make ends meet,” said Grant Bazian, president of MNP. “Still, financial pressure is easing, providing individuals with more flexibility to manage their debts and invest in their future.”

Impact of interest rates

Expectations around interest rates also appear to be improving. With the prospect of continued interest rate reductions, 24 per cent of Canadians — a three-point increase from last quarter — now feel better equipped to handle a one-percentage-point rate hike. Meanwhile, more Canadians are feeling optimistic about the future, with 31 per cent expecting their debt situation to improve within the next year, and fewer expecting it to worsen (12 per cent, a 4-point drop).

However, despite these positive trends, concerns remain. Almost half of Canadians (48 per cent) still express anxiety about their ability to repay debt, even in the face of declining interest rates. While slightly fewer Canadians say they would be in financial trouble if rates were to rise, more than half (54 per cent) remain worried about this possibility. Individuals sharing expenses, such as co-habitants (46 per cent) and bill-splitters (44 per cent), are among the most vulnerable to insolvency.

“Although inflation has eased and interest rates have fallen, many Canadians continue to feel the heavy burden of accumulated debt. Despite some relief, the difficult truth is that for those grappling with significant debt, cost-cutting measures alone may not provide the support they need,” Bazian said. “Seeking guidance from a Licensed Insolvency Trustee can be a vital step for those looking to regain control of their financial situation, and bankruptcy is not the only recourse.”

Image credit: Depositphotos.com

The post Canadians getting some financial breathing room appeared first on Auto Service World.

Whether it’s cost of living, desire for more space or the slower pace, people moving out of cities and into suburban communities has benefits for the automotive aftermarket. However, those living in cities are still key clients for the industry, an industry expert observed.

During the Three Dragons session at this year’s MEMA Aftermarket Suppliers Conference in Detroit, Greg Melich, senior managing director at Evercore ISI, provided the Wall Street perspective of trends taking place in the auto care sector. One of the trends he highlighted was the one that accelerated over the COVID-19 pandemic and saw people leave large urban centres for smaller suburban ones.

To Melich, whether people are driving their personal vehicle or using a ridesharing problem like Uber or Lyft, there’s a vehicle still accumulating mileage and that vehicle still needs to be maintained and repaired. However, people moving to the suburbs means more of a need for a vehicle as consumers generally have to travel farther per trip, be it for work or errands. So customer makeup could be different.

That said, while vehicle usage increases in suburban areas, Melich noted that incomes are generally lower than in urban areas. That means households with more vehicles in their driveways actually have less income than those in urban centres with fewer cars — so lower-income families are spending more on vehicle repair.

“This is one of those unique consumer categories where consumption of units doesn’t go up where incomes are higher in these more densely populated markets,” Melich observed. “So this is an area where having affordable cars that people can drive to get to work is such a key part of the equation.”

As for a tail risk, he pointed to electric vehicles. He noted investors are nervous when it comes to investing in the aftermarket because of the uncertainty of EV lifespan — making these essentially disposable vehicles — and issues around right to repair and if the industry will even be able to repair EVs.

“Because if we can’t fix the electric cars, and we don’t find a way to rebuild them … there’s a risk in 10 years that this industry,” could shrink.

The post Why people moving to the ‘burbs helps the aftermarket appeared first on Auto Service World.

A new report points to significant hurdles for electric vehicles (EVs) in appealing to the majority of pre-owned vehicle buyers. This could potentially prolong the lifespan of internal combustion engine (ICE) vehicles and boosting the ICE aftermarket well into the future.

The  Lang Marketing report, EVs Lack Appeal for Many Pre-Owned Buyers, Boosting the Long-Term ICE Aftermarket, highlighted the challenges facing EV adoption considering that 80 per cent of vehicles on the road are pre-owned vehicles in the U.S.

Buyers of such vehicles are not as enthusiastic about EVs as new-car buyers, raising concerns about the long-term viability of the used electric vehicle market, Lang noted.

“”Without a strong market of secondary buyers who will purchase an increasing number of pre-owned Electric Vehicles, sales of new BEVs face strong headwinds, likely causing Internal Combustion Engine (ICE) vehicles to remain on the road longer than is common today,” Lang’s report said.

Here’s a rundown of what its report found.

New vs. pre-owned EV buyers

While EVs, particularly battery electric vehicles (BEVs), have gained traction among environmentally conscious new-car buyers, they remain largely a niche product.

Many new BEV owners are willing to overlook the operational limitations of current EV technology, including range, charging issues, and long-term reliability. However, these factors pose significant barriers to entry for pre-owned buyers, who may not have the flexibility or resources to navigate these challenges.

Range anxiety and charging infrastructure

One major obstacle is range anxiety. Many pre-owned vehicle buyers place greater importance on driving range than their new-car counterparts. While current BEV owners tend to drive fewer miles annually, this is not the case for most used-vehicle buyers. Furthermore, as the report notes, over 75 per cent of new BEV buyers charge their vehicles at home—an option that may not be available to many pre-owned buyers, particularly those living in apartments or lacking the necessary charging equipment.

The report stressed the need for a nationwide fast-charging network to accommodate the growing number of all-electric vehicles.

“Construction of an efficient and convenient charging infrastructure is a massive challenge, and even with strong government support, it will likely not be achieved for many years,” Lang said.

Reliability

Another major concern highlighted in the report is the long-term reliability of BEVs, particularly the cost of battery replacement. With battery replacements potentially exceeding US$6,000, many older BEVs may be scrapped rather than repaired. This is especially concerning to Lang given that the average vehicle on U.S. roads today is nearly 13 years old.

Moreover, some BEVs, like Tesla, may suffer from operational issues linked to relatively minor body damage, a problem that could disproportionately affect pre-owned buyers.

The future of ICE vehicles

Given these challenges, Lang Marketing predicted that ICE vehicles will continue to be a staple of the automotive landscape for many years to come. Their ability to meet critical driving needs — such as long-distance travel, ease of refueling, and performance in extreme weather conditions — ensures that many consumers will hold onto their ICE vehicles for longer.

The report further noted that while EVs will continue to increase their share of new vehicle sales, they may struggle to meet the needs of the pre-owned market. This could pave the way for a “Golden Age” of the ICE aftermarket, expected to extend well past 2040.

Image credit: Depositphotos.com

The post Uncertain used EV market points to strong ICE market appeared first on Auto Service World.

Light trucks have extended their domination in the new vehicle market, continuing to account for the vast majority of sales.

At the same time, the luxury vehicle market is retreating, according to data from DesRosiers Automotive Consultants.

New light vehicle sales in Canada grew by 4 per cent in the third quarter of 2024, contributing to a year-to-date increase of 8.1 per cent. However, the passenger car segment continues to shrink, reporting a 10 per cent decline in Q3 and a 3 per cent decrease so far this year.

This shift has resulted in light trucks accounting for a dominant 86.4 per cent of the market, leaving just 13.6 per cent to passenger cars.

One of the standout trends this year has been the continued strength of small mainstream SUVs. Both subcompact and compact SUV segments have posted significant year-to-date gains, with increases exceeding 20 per cent. In Q3, compact SUVs saw rising sales, while subcompact SUVs experienced a slight dip but maintained strong year-to-date growth.

Unexpectedly, DesRosiers reported, small vans — which have steadily lost ground to SUVs over the years — saw a resurgence, posting a 17 per cent increase in sales compared to the same period last year.

But the luxury market is stumbling, proving to be a weak spot in 2024. Combined, luxury segments experienced an 8.5 per cent decline in Q3 and a 2.4 per cent decrease year-to-date. Only compact and intermediate luxury SUVs showed modest growth, up 2.6 per cent and 1.7 per cent, respectively.

Andrew King, managing partner at DesRosiers, attributed this pullback to a combination of high vehicle prices and rising interest rates.

“The luxury segments have seen long-term structural growth over the past two decades as baby boomers accumulated wealth,” King said. “Faced with high vehicle prices and high interest rates consumers have pulled back from luxury in 2024. It will be interesting to see if this is a temporary pause or the start of a longer-term market shift.”

Image credit: Depositphotos.com

The post SUVs continue to lead buyer preferences appeared first on Auto Service World.

Canada’s electric vehicle (EV) market is gaining traction, but significant hurdles in infrastructure and consumer incentives threaten to stall progress, warned a new report.

Globally, the demand for EVs has plateaued in key markets, including the U.S. and much of Western Europe, according to EY’s 2024 Mobility Consumer Index. This slowdown is attributed to geopolitical and economic factors, as well as shifting consumer attitudes.

It noted that these regions are seeing initial excitement for EVs wane as practical issues such as affordability, inadequate charging infrastructure, and concerns over battery longevity come to the forefront.

But not so much in Canada as EV sales grow. But there are risks due to slow infrastructure development and insufficient consumer incentives.

The comprehensive survey by EY showed that while the number of EV models available to Canadians has surged and automakers have pledged $25 billion in new investments, primarily in EV assembly and the battery supply chain, persistent issues like range anxiety, high purchase prices and inadequate charging infrastructure continue to deter many potential buyers.

In Canada, a significant portion of consumers (66 per cent) remain hesitant to consider an EV for their next vehicle purchase, citing range anxiety, purchase price and lack of charging infrastructure as primary barriers.

To address these issues, a comprehensive national effort is required to build infrastructure and improve EV readiness, EY stated.

The global EV market’s growth has decelerated from 37 per cent year-on-year in 2022 to 29.7 per cent in 2023, with further decline expected in 2024. The slowdown is more pronounced for battery electric vehicles (BEVs), with sales growth halving from 65 per cent in 2022 to 32 per cent in 2023. Contributing factors include a lack of affordable models, range anxiety, charging time, poor availability of charging infrastructure, fear of high maintenance costs and concerns over resale value.

To reignite growth in the EV market, a strategic focus on infrastructure and value is essential, EY observed. Governments and industry players must collaborate to address these barriers and create a more favourable environment for EV adoption. This includes investing in charging infrastructure, offering consumer incentives, and promoting the benefits of EVs to mainstream consumers.

Image credit: Depositphotos.com

The post Canada shows growing momentum for EVs appeared first on Auto Service World.

Drivers are quickly finding ways to bypass safety limits in partially automated driving systems, according to a new study from the Insurance Institute for Highway Safety (IIHS), raising questions about how effectively these systems prevent risky behaviour.

The study examined how drivers interact with advanced driver assistance systems (ADAS) like Tesla’s Autopilot, GM’s Super Cruise and others, which are designed to assist with tasks like steering, braking and lane-keeping.

While these systems are intended to enhance safety, they rely on the driver remaining attentive and ready to take control. However, the IIHS report reveals that drivers are finding creative ways to sidestep the very safeguards that are meant to ensure their engagement.

Researchers found that drivers of vehicles equipped with these systems can easily trick the monitoring features, such as placing objects on the steering wheel to mimic hands-on driving or using simple hacks to bypass alerts meant to keep them engaged. This behaviour allows them to disengage from the driving task for extended periods, undermining the purpose of the safety features.

“The study underscores a major gap in the effectiveness of these systems,” said Alexandra Mueller, the study’s lead author. “By circumventing the safety features, drivers are essentially nullifying the systems’ ability to reduce risk.”

Partially automated systems like Autopilot and Super Cruise require periodic driver interaction to ensure attentiveness, but the study found that even more advanced systems, such as GM’s Super Cruise, which uses cameras to monitor eye movement, are not immune to workarounds. While eye-tracking systems are a step up from basic steering wheel sensors, drivers can still fool the technology by using eyewear or making brief glances to trigger the system.

The IIHS has called for stronger regulations and more robust safeguards to address these issues. Suggestions include limiting the amount of time that automated features can remain engaged without manual input, implementing stricter driver monitoring systems and improving the design of these technologies to prevent circumvention.

Mueller and her team argue that as automated technology advances, it’s crucial to develop systems that better account for human behaviour and the tendency to misuse or override safety features.

“The problem is not just in the technology itself but how drivers interact with it,” Mueller added. “People find ways to make the systems work for them, even in ways they weren’t designed for, which puts everyone on the road at risk.”

With automation becoming increasingly integrated into the modern vehicle, the report concluded that manufacturers need to focus not only on developing cutting-edge technology but also on implementing safeguards that truly deter unsafe driving practices. In doing so, the automotive industry can better ensure that partial automation systems contribute to improved road safety rather than inadvertently enabling reckless behaviour.

Image credit: Depositphotos.com

The post Drivers find safety feature workarounds appeared first on Auto Service World.

A new report highlighted just how much cheaper electric vehicles need to get in Canada to reach mandated sales levels.

Unless policies or technologies change, the purchase cost of EVs needs to decrease by 31 per cent for Canada to reach its sales target of 60 per cent EVs by 2030, according to a new report released recently by Parliamentary Budget Officer (PBO) Yves Giroux.

“In the absence of a government mandate and regulations forcing manufacturers to sell at least 60 per cent of zero-emission vehicles, that’s the price differential that one would need to meet these targets,” Giroux said in an interview with CTV News Channel.

Last December, the federal government unveiled its Electric Vehicle Availability Standard, which outlines zero-emission vehicle sales targets for automakers. The standard requires all new light-duty sales in Canada to be electric or plug-in hybrid by 2035, with interim targets of at least 20 per cent of all sales being EVs by 2026 and 60 per cent by 2030. Automakers who do not meet those targets would have to pay into charging infrastructure.

The most recent statistics show that electric vehicles accounted for nearly 11 per cent of new vehicle registrations in 2023, but there are concerns that driver demand is slowing down. Growth forecasts for auto companies have plateaued, and concerns about charging infrastructure persist. The price of EVs has also pushed the cars out of reach for many consumers. According to the Canadian Black Book, the average cost of an EV was $73,000 in 2023.

However, the PBO acknowledged that consumers could save thousands of dollars in the long run by switching to an electric vehicle. According to the report, the ownership cost, which includes the price of a car and operating costs, of an EV over eight years would be $62,920 if the car was purchased in 2022, while the cost would be $71,680 for a gas-powered vehicle.

“It means that the relative price has to go down for EVs. It can be done by bringing the cost of electric vehicles down, but it could also be by increasing the cost of all the other alternatives, which is the gas- and diesel-powered cars and trucks,” Giroux said, according to CTV.

Some provinces offer their own EV incentives, many will wind down by the end of 2026. British Columbia is limiting the vehicle models that will qualify for rebates, while Quebec is cutting rebates by 60 per cent next year and phasing them out completely by 2027.

The new PBO report also assessed public charging stations. While it said the federal government’s EV sales target would increase the supply of charging ports in Canada by nearly 39,000 units, it does fall short of demand. 

“We estimate that by 2030 the market provision of public charging ports will be somewhat less than what is required according to a needs analysis commissioned by Natural Resources Canada,” the report stated.

Image credit: Depositphotos.com

The post How much cheaper EVs need to get in Canada appeared first on Auto Service World.

Production costs of batteries for electric vehicles is expected to drop in the coming years, an automaker leader recently predicted. And range is expected to significantly grow.

At this year’s International Vienna Motor Symposium, Volkswagen board member Michael Steiner predicted that battery production costs are expected to decrease by up to 40 per cent by 2035, with improvements in charging speed, durability, range, recycling, sustainability and safety.

 “The battery cell is the heart of electromobility,” said Steiner, who is chief research officer of Volkswagen Group.

He also noted that his group views standardization as a key solution to reducing costs.

“Battery systems account for around 40 per cent of vehicle costs. It is therefore vital to standardize all components of a battery system in order to reduce complexity and to bring costs under control,” added VW battery expert Marcel Hollweg.

The VW standardization strategy encompasses design, production and recycling of battery components.

“In the future, around 80 percent of the VW Group’s vehicles will be rolled out with the standardized unit cell,” explained head of development Arno Perner. These cells, all prismatic and designed for 400 or 800 volts, range from low-cost sodium-ion cells to high-performance solid-state cells.

Range expansion

The promise of solid-state cell technology would replace the liquid electrolyte with semi-solid or solid electrolytes, allowing higher energy densities (more than 400 watt hours per kilogram), greater safety and faster charging. That makes 800 kilometres of range a possibility for the future.

Fabian Duffner, a battery expert at Porsche Consulting, noted that Japan, South Korea, China and the U.S. are leading in this development. However, he noted, solid-state technology faces technical and financial hurdles.

“A solid-state battery requires significantly more lithium per kilowatt hour than a conventional lithium-ion battery,” Duffner said, making it more dependent on the fluctuating price of lithium.

Conventional lithium batteries will continue to exist, especially in the cost-sensitive mass market sector. Lithium iron phosphate batteries, known for their long service life and low costs but modest range, are widely used for both trucks and cars.

Geon Seog Son, a battery materials expert at Umicore in Korea, highlighted that sodium-ion cells, which are cheaper and safer, are currently available in a small sector in China but are expected to expand.

Image credit: Depositphotos.com

The post EV battery prices to drop, range expand appeared first on Auto Service World.

A new pilot study in the Greater Toronto and Hamilton Area (GTHA) aims to save electric vehicle drivers up to 70 per cent on charging costs while addressing the increased strain on the electric grid.

The pilot program is part of a study conducted by San Francisco-based Optiwatt, a telematics-based home energy analytics platform, and Toronto’s The Atmospheric Fund (TAF). The study is investigating how regional utilities can meet increased energy demand as EV adoption rises across the region.

Experts have warned that the growing number of EVs could strain Canadian electricity grids. The Fraser Institute predicted that annual EV electricity demand will increase between 46.8 terawatt hours (7.5 per cent of total generation) to 95.1 terawatt hours (15.3 per cent) by 2035.

Additionally, a study from the University of Concordia found that simultaneous EV charging could potentially cause blackouts.

While the study aims to find ways to reduce the strain on the region’s utilities and meet the rising demand for EVs, the immediate beneficiaries will be local participants who will save an average of $388 per year. EV drivers in the GTHA are encouraged to join the free program by downloading the app or visiting www.optiwatt.com/gtha.

The cost savings come as the J.D. Power 2024 Canada Electric Vehicle Consideration Study, released in June 2024, found that Canadians are becoming more wary of the cost of buying and maintaining an electric vehicle. Only 11 per cent of new-vehicle shoppers in Canada say they are “very likely” to consider an electric vehicle (EV) for their next purchase, down three percentage points from 2023 and less than half of the 24 per cent of U.S. shoppers who say they are “very likely” to consider an EV.

The pilot program automates EV charging during hours with cheaper electricity rates. EV owners with Time of Use (TOU) or Ultra Low Overnight (ULO) plans stand to save up to 70 per cent on their EV charging costs. A similar study took place in Alberta in 2023.

“We launched Optiwatt to help EV drivers who were having a hard time optimizing their charging routines, but our platform has since grown and evolved. Now, it not only delivers real savings for EV owners but also helps utility companies incentivize drivers to use clean energy at reduced rates,” says Casey Donahue, founder and CEO of Optiwatt. “This is a win-win solution, allowing users to save time and money while encouraging greater EV adoption, and accelerating a smoother transition to green energy for communities by supporting the electrical grid.”

U.S. utilities that use similar programs to the one being piloted by Optiwatt offer drivers additional monetary rewards such as rebates or refunds. Canadian utilities that adopt the program at scale are expected to offer similar compensation, essentially rewarding drivers for helping their communities transition to clean energy.

Optiwatt will administer the pilot program in partnership with Dunsky Energy + Climate Advisors, a Canadian-based consultancy firm that supports governments, utilities, and other organizations across North America in their efforts to accelerate the clean energy transition. Dunsky and Optiwatt will provide an effective analysis to assist utility companies in using these findings to develop improved rewards programs for EV drivers.

“There is tremendous potential for technologies that manage electricity demand to support rapid electrification and clean energy production in the GTHA,” says Aakash Harpalani, director of clean energy at TAF.

Image credit: Depositphotos.com

The post How much EV drivers could save on charging costs appeared first on Auto Service World.

A new report found significant reliability issues in the electric vehicle charging infrastructure identifying key factors that hinder the growth of EV adoption.

The EV revolution has dramatically transformed the automotive industry, with global EV sales soaring by 233 per cent over the past five years, according to the International Energy Agency (IEA), by ChargerHelp outlined in an announcement of its findings.

However, the rapid growth in EV sales has outpaced the development of the necessary public charging infrastructure in the United States, contributing to a slowdown in projected EV sales as customers continue to point to this issue as holding them back from buying EVs.

A 2023 poll found that more than half of Americans are hesitant to consider purchasing an EV, with 80 per cent citing a lack of charging infrastructure as a primary concern. Additionally, the existing network of public chargers is plagued by reliability issues, with one in every five charging attempts failing.

ChargerHelp noted that there has been a lack of comprehensive data explaining these failures and how to address them but its recent study took a look at the public charging infrastructure to uncover the root causes of these reliability issues.

The ChargerHelp Annual Reliability Report: The State of EV Charging and the Driver Experience looked at more than 19 million individual data points.

“After pulling data for four years from 20,000 chargers, we identified key areas where the public charging system can be improved to better meet the needs of today’s EV driver,” said Kameale Terry, co-founder and CEO of ChargerHelp. “For the EV market to continue to flourish, we need to work to ensure true uptime is the norm through a standardized and more synchronized approach to data, maintenance and communication networks.”

The report highlights a range of issues, with a lack of interoperability standing out as a significant threat to system reliability and broader EV adoption in the United States. Interoperability refers to the compatibility of key system components — vehicles, charging stations, charging networks, and the grid — and the software systems that support them, allowing all components to work seamlessly and effectively.

Image credit: Depositphotos.com

The post The reliability issues with EV charging infrastructure appeared first on Auto Service World.

New analysis from S&P Global Mobility reveals a significant rise in brand loyalty rates within the automotive industry for the first half of 2024, marking the first year-over-year increase since 2020.

Industry brand loyalty rates have trended upward in the first half of 2024, following several years of flat or declining values, S&P Global Mobility reported.

The industry’s brand loyalty rate through June stands at 52.5 per cent, reflecting a 1.9 percentage point (PP) improvement over the same period in 2023. This marks the first year-over-year increase since 2020, which the group called a positive sign for the industry after several years of lower loyalty levels due to inventory shortages and post-pandemic recovery.

More than half of all brands in the industry saw a year-over-year increase of 1 percentage point or better. This group included both mainstream and luxury brands, which saw increases of 1.9 PPs and 1.4 PPs, respectively. Growing inventory levels and a strong pipeline of return-to-market households were the primary factors in loyalty gains for the first half of 2024.

“Last year we saw a big jump in the number of households returning to market for a new vehicle, but the inventory was lacking,” said Vince Palomarez, associate director of loyalty product management at S&P Global Mobility. “This year, return-to-market volume remains consistent; however, inventory levels are up more than 40 per cent, so households have more opportunity to remain loyal to their previous brand.”

Among individual brands, Tesla continues its run as the leader in brand loyalty with a rate of 67.8 per cent for the first half of 2024. While all Tesla models retain more than 60 per cent of their previous owners, the Model 3 remains the leader in the brand’s lineup with a loyalty rate of 72.1 per cent.

“Tesla has historically been a brand with strong loyal ties among their consumer base, despite a limited product portfolio,” said Palomarez. “Changes in BEV prioritization among other OEMs, along with Tesla’s directive to cut pricing when needed, has kept households from defecting.”

The group also noted that General Motors leads all multi-brand manufacturers in manufacturer loyalty for the first half of 2024, at 67.7 per cent.

Image credit: Depositphotos.com

The post Auto brand loyalty sees first increase in years appeared first on Auto Service World.

A recent MIT study found that electric vehicle charging stations significantly increase consumer spending at nearby businesses.

The study, which analyzed data from over 4,000 charging stations and 140,000 businesses in California, found that the presence of EV chargers led to an average annual spending increase of about $1,500 per business in 2019 and approximately $400 per business between January 2021 and June 2023.

The research highlights that the economic benefits of EV charging stations are particularly pronounced for businesses located within 100 yards of the chargers and those in low-income areas. This finding underscores the potential for EV infrastructure to support local economies, especially in underserved communities.

Lead author Yunhan Zheng, a postdoctoral researcher at the Singapore-MIT Alliance for Research and Technology (SMART), emphasized the broader implications of the study.

“These increases are equal to a significant chunk of the cost of installing an EV charger, and I hope this study sheds light on these economic benefits,” Zheng said.

The study’s findings suggest that EV charging stations could diversify income streams for charger providers and site hosts, leading to more informed business models.

The researchers used anonymized credit and debit card transaction data to measure changes in consumer spending, providing a robust empirical basis for their findings.

These findings hold a lesson for charging station developers looking to improve the profitability of their projects.

“The joint gas station and convenience store business model could also be adopted to EV charging stations,” Zheng said. “Traditionally, many gas stations are affiliated with retail store chains, which enables owners to both sell fuel and attract customers to diversify their revenue stream. EV charging providers could consider a similar approach to internalize the positive impact of EV charging stations.”

Image credit: Depositphotos.com

The post How much EV charging stations boost spending in local businesses appeared first on Auto Service World.

Despite a rapidly changing automotive landscape, Canada’s vehicle fleet remains steady.

Canada has about 26.7 million light vehicles in operation. That’s up from 26.3, or 1 per cent, from 2022, according to Stats Canada data. Meanwhile, the U.S. VIO number has grown about 2 per cent since 2021.

A growth number that low indicates that at the least there’s no contraction of vehicles in Canada. But it’s not expanding a whole lot either, meaning the number of vehicles able to be maintained and serviced by the aftermarket isn’t growing.

Todd Campau, aftermarket practice lead at S&P Global Mobility described this figure as a neutral indicator at AIA Canada’s National Conference.

“It’s not growing real fast, it’s not shrinking real fast. But there are some external stimuli that are causing it to kind of stay flat,” he observed.

Campau highlighted a significant shift in vehicle preferences across North America, with a marked trend towards light trucks, including crossover utility vehicles (CUVs).

“We are seeing a rapid shift towards light trucks across North America,” he explained. “Passenger cars are essentially falling kind of off the cliff.”

Because there’s a low volume of passenger cars, that segment is aging rapidly. On the flip side, light truck age growth is staying more muted because they’re gaining more and more market share every year.

Turning to vehicle registrations, Campau provided a positive outlook, though not quite where they used to be just yet. After hitting 1.48 million unit sales in 2022, sales crept up to 1.66 in 2003, according to DesRosiers. Canada was on pace for 1.68 million units sold in April and that number has only grown to 1.78 as of September.

Slowly, numbers are going up to historical norms, Campau said. He noted that the Canadian new vehicle market showed resilience during both the pandemic and the Great Recession, outperforming the U.S. market.

“Actually, it’s a little better than what we saw in the U.S. The Canadian new vehicle market was pretty resilient,” Campai said.

Campau emphasized the importance of new vehicles entering the market for the health of the aftermarket sector.

“This is our pipeline. I know a lot of times we feel like it’s us against them; It’s OEMs versus aftermarket. And to a degree, we do battle on how to repair the vehicle,” Campau acknowledged. “But without the vehicles coming into the market, our pipeline dries up. And if our pipeline dries up in five or six years, that’s really bad for us.”

However, Campau pointed out that scrappage rates in Canada remain high, affecting the overall fleet size. Scrappage meaning any vehicle leaving the vehicle fleet, such as by end of life or exported.

“We’re still seeing pretty high scrappage. That’s a large number of vehicles that are leaving your fleet every year. It does seem like it’s recovering. But still, I’d like to see obviously a lower number to maintain that fleet growth in the upward direction,” he said.

Image credit: Depositphotos.com

The post Why isn’t Canada’s vehicle fleet growing? appeared first on Auto Service World.

Despite a dip in September sales, Canada’s auto market maintains a robust year-to-date growth, driven by strong performances from key brands.

Canada’s automotive market experienced a slight setback in September, with sales of new vehicles dropping 3.6 per cent compared to the same month last year.

This downturn comes after a warning from DesRosiers Automotive Consultants last month about the challenges of sustaining year-over-year gains in the final months of 2024.

Andrew King, managing partner at DesRosier, noted two reasons for the September market decline. One, September 2023 marked the early stages of when vehicle availability improvement was widely seen in the market.

“So it does present a fairly strong comparable,” he noted.

Secondly, the timing of this year’s Labour Day holiday meant there were three fewer selling days in 2024 compared to last year.

These factors combined to create a challenging month for the market, although the seasonally adjusted annual rate (SAAR) for September remained steady at 1.78 million units, consistent with July and August figures.

Despite the September dip, the year-to-date performance of the market remains impressive, the consultancy noted. By the end of the third quarter, the market had reached 1.41 million units, an 8.1 per cent increase from the first nine months of 2023.

Several brands have shown growth during this period. Volkswagen leads the market in percentage gain among higher volume brands, with a 55.8 per cent increase in 2024. Subaru and Mazda also posted strong performances, up 31.7 per cent and 26 per cent respectively, both surpassing the 50,000 sales mark YTD. General Motors (GM) leads in volume, with sales of 216,000 units, a 9.7 per cent rise from 2023.

However, DesRosiers did point out that the luxury segment is still facing difficulties in 2024, a trend that it plans to dig into.

The streak of increased year-over-year sales ended in June as 2024’s numbers matched 2023, however, it was seen as a blip at the time as outside factors, led by a cybersecurity incident, dampened sales numbers.

As the market moves forward, DesRosiers will closely monitor several key economic indicators, including employment data, Consumer Price Index (CPI) data and a Bank of Canada interest rate announcement. It further warned that the ongoing strike by American dockworkers strike could impact vehicle production, adding another layer of complexity to the market dynamics.

Image credit: Depositphotos.com

The post New sales market sees first real setback appeared first on Auto Service World.

Contrary to popular belief, Gen Z is hitting the road more than ever, with nearly half reporting increased driving over the past five years, according to a recent survey.

The 2024 “On the Move” Mobility Survey from Enterprise Mobility found some trends in U.S. that may surprise some when it comes to transportation habits, particularly among Gen Z.

The survey found that 47 per cent of Gen Z respondents are driving more than they did five years ago. This increase is higher than any other generation, with 41 per cent of millennials, 33 per cent of Gen X, and only 16 per cent of baby boomers reporting similar trends.

This surge in driving among Gen Z challenges the perception that younger generations prefer alternative modes of transportation. The survey highlights that 85 per cent of all respondents believe owning their own transportation provides the most personal freedom, and 66 per cent expect this freedom to become even more important over the next decade.

The survey also looked into perceptions of emerging vehicle technologies like autonomous and EVs.

Autonomous vehicles were met with mixed feelings; 41 per cent of respondents said they were excited about the technology, citing potential benefits such as making travel easier for those who cannot or prefer not to drive (50 per cent) and allowing people to engage in other activities while travelling (40 per cent).

The survey also noted barriers to widespread EV adoption. While 40 per cent said they would consider driving a fully electric vehicle in the future, the primary motivators are fuel cost savings (44 per cent) and positive environmental impact (34 per cent). However, 68 per cent of respondents believe there is a lack of necessary infrastructure to support widespread EV adoption.

The post Gen Z bucking perceptions of driving desire appeared first on Auto Service World.

Image credit: Depositphotos.com

Car seats are a crucial consideration for many parents when purchasing a vehicle, according to a new study.

More than 60 per cent of parents stated that car seat compatibility significantly influences their buying decision, according to the survey conducted by car-shopping marketplace Cars.com.

Some parents are even bringing car seats to dealerships to ensure a proper fit before committing to a purchase. Among those who took this extra step, 84 per cent reported that their questions were answered effectively, making the process smoother and providing greater peace of mind.

In its 2024 Best Cars for Car Seats Report, Cars.com evaluated 52 model-year 2023-2025 vehicles, and only six vehicles, all SUVs, were deemed worthy of top spots on this year’s list. Volkswagen models were particularly prominent, capturing half of the top positions. The top-performing models identified in the report include:

• 2024 Lexus RX 450h+
• 2024 Nissan Pathfinder
• 2024 Subaru Crosstrek
• 2024 Volkswagen Atlas Cross Sport
• 2024 Volkswagen Atlas
• 2024 Volkswagen ID.4

The report also highlights the importance of budget considerations for families. Notably, five of the six top vehicles also appeared on Cars.com’s 2024 American-Made Index, with the Volkswagen ID.4, which ranked third, standing out for its affordability. The ID.4 has recently seen a 21 per cent price drop on Cars Commerce’s New Car Price Index.

The post What parents look for most when buying a new car appeared first on Auto Service World.

A recent paper has found that Canadians have little knowledge of data access and control in their vehicles.

Fewer than a third (29 per cent) of drivers say they clearly understand who has access to the data their vehicle produces, while most (63  per cent) want to know who controls that data, according to the study, Data dynamics: Exploring vehicle owners’ data awareness, ownership and sharing, published last week by AIA Canada.

The study highlights the growing awareness of the amount of data consumers leave behind as everyday actions — such as shopping, watching videos online and driving habits — produce data valuable to stakeholders for various purposes.

Through a survey of vehicle owners, AIA Canada, in collaboration with Quorus Consulting Group, explored behaviours, attitudes and preferences related to in-vehicle data, including data ownership preferences and expectations, self-assessed awareness of the types and amount of data produced by their vehicles and data-sharing preferences.

The survey allowed the research team to analyze responses across key demographic categories such as age and gender, region and various vehicle profile variables like type, age and warranty status.

Three-quarters of respondents believe the vehicle owner should own the data. Only 10 per cent said the vehicle manufacturer is entitled to it…

In addition to wanting more clarity on who has access to their vehicle’s data, more than half (51 per cent) of respondents said they want a better understanding of how much data is produced. Meanwhile, 39 per cent said they wouldn’t know where to find their vehicle’s data.

Three-quarters of respondents believe the vehicle owner should own the data. Only 10 per cent said the vehicle manufacturer is entitled to it, and just four per cent said the company that developed the technology collecting the data should have ownership.

More than three quarters (78 per cent) of respondents believe vehicle manufacturers have a responsibility to do more to educate owners about vehicle data ownership.

When it comes to sharing data, 74 per cent said they would wirelessly transmit certain vehicle diagnostics to their regular service provider to help keep them updated on repair and maintenance timelines.

Nearly half (46 percent) said they would send their driving behaviour data to insurance companies to adjust premiums accordingly.

The report acknowledged that knowing how much data is left behind and tracked from everyday actions can be concerning or overwhelming for consumers. While some may embrace data tracking by staying up to date with the latest devices and apps, others may not be aware of the extent of data collection or may be concerned about the privacy of their personal information.

The report is free for AIA Canada members or $199 for non-members.

The post Lack of understanding around vehicle data issues appeared first on Auto Service World.

With car manufacturers packing more technology into vehicles than ever before, a recent survey highlights which features drivers can’t live without — and which ones they’re willing to pay extra for.

Car manufacturers are increasingly incorporating advanced technology features into modern vehicles to enhance safety and convenience. A recent survey conducted by Uswitch aimed to identify the tech features that car owners find most useful and those that would influence them to pay more for a vehicle.

The survey revealed that parking sensors are the most popular tech feature, with 62 per cent of respondents considering them useful, and more than half (53 per cent) using them regularly. Parking sensors use radar technology to audibly alert drivers of obstacles when parking. Respondents cited safety (82 per cent), convenience (50 per cent) and efficiency (40 per cent) as the main reasons they find parking sensors useful.

Parking cameras are also favoured by nearly three in five (57 per cent) car owners, with respondents highlighting safety (82 per cent), convenience (48 per cent) and security (40 per cent) as key benefits.

Defrosters on sideview mirrors ranked third, with 40 per cent of respondents considering them useful for safety (59 per cent), convenience (59 per cent) and efficiency (38 per cent).

The survey also found that car tech features play a significant role in purchase decisions. Among drivers with built-in tech features, 38 per cent reported that these features influence their decision to buy a vehicle. Specifically, 35 per cent of respondents indicated they would pay more for a car with parking cameras or parking sensors, noting the potential cost savings of having these features pre-installed.

Image credit: Depositphotos.com

The post Top tech features car owners want appeared first on Auto Service World.

The automotive aftermarket will have access to even more electric vehicle experiences, along with the usual industry trend insights at AAPEX this year during Industry Week.

AAPEX 2024 is expanding its EV experience to provide more expert-led training sessions and product spotlights on the show floor, ensuring all segments of the automotive aftermarket are fully prepared for the transition to EVs.

From Nov. 5-7 in Las Vegas, attendees can choose from more from 15 EV-specific training sessions held on the EV Stage in Joe’s Garage, which can be found back on Level 1 of The Venetian Expo. Topics will include profitable servicing of EVs and their batteries, electrified vehicle maintenance, diagnosing the 12V power system, EV and hybrid HVAC systems and upcoming technological advancements that will drive EV adoption rates.

In addition, the session “Joint EV Trends and Outlook Forecast” will showcase new forecasts for growth in electric vehicle sales, the share of vehicles in operation, and predictions for select EV-related parts categories. This session will take place on Nov. 5, from 1:45 p.m. to 3:15 p.m.

Meanwhile, attendees can head to the show floor and check out exhibiting companies highlighting the latest EV advancements, providing access to the products and specialized expertise needed to service the rapidly expanding EV market.

Furthermore, the popular AAPEX General Sessions, “Trends Impacting the North American Aftermarket” and “Aftermarket Outlook 2025,” will return with new data, insights and market research.

Todd Campau, aftermarket practice leader at S&P Global Mobility, will kick off with his annual overview of key industry trends impacting the North American aftermarket and new insights affecting the global aftermarket. He’ll go through how the automotive aftermarket continues to evolve with the changing new vehicle market, the path to electrification and the aging vehicle fleet. You can catch this session will be held on Nov. 5, from 11 a.m. to noon, at The Venetian, Level 1, Galileo Room 901.

At the Aftermarket Outlook 2025 session, Circana’s executive director and industry analyst, Nathan Shipley, will cover trends observed in general retail and the aftermarket over the past two years. He’ll explain why understanding the drivers of sales performance during this period is crucial for predicting the near-term future of the industry. Shipley will also provide perspectives on how macro trends, both industry-specific and general, might influence future results. This session will take place on Nov. 6, from 11 a.m. to noon, at The Venetian, Level 1, Galileo Room 901.

The post The EV training, industry trends you can learn at AAPEX appeared first on Auto Service World.

A recent survey has found that there are deficiencies in Canadian drivers’ understanding of dashboard warning lights.

The survey for Diono, a maker of children’s car seats, found that a significant number of Canadian drivers struggle to understand their vehicle’s dashboard warning lights, a confusion that could lead to dangerous situations on the road.

The study, which surveyed 2,000 Canadian drivers, aimed to assess how well they recognize and react to various dashboard symbols. Participants were asked to identify common warning lights, with some less familiar symbols included to test their knowledge. The findings suggest that as vehicles become more technologically advanced, driver education on dashboard literacy has not kept pace.

“Drivers understanding what the warning signs on their vehicles mean could be the difference between life and death, for you, your passengers or other road users,” said Tim Maule, CEO of Diono, “These warning signs are there for your safety and should never be ignored. If one comes on, don’t ignore it. If you don’t know what a warning sign means, either refer to your car manual … then seek expert mechanical help if appropriate.”

Confidence in dashboard literacy

When asked about their confidence in identifying dashboard warning lights, the survey revealed a wide range of responses, highlighting a notable gap in driver confidence.

Only 21 per cent of drivers felt extremely confident in their ability to recognize these symbols, while 29 per cent felt quite confident. A significant portion, 33 per cent, only felt moderately confident, and 14 per cent were slightly confident. Just 3 per cent of respondents admitted they were not at all confident in their ability to identify warning lights.

Handling of warning lights

The study also examined how drivers would respond if a warning light appeared on their dashboard and they were unsure of its meaning. The results showed a concerning number of drivers who might ignore potentially critical alerts.

Only 26 per cent of drivers said they would stop their vehicle immediately, demonstrating a cautious approach. Meanwhile, 39 per cent would seek help by calling someone or searching for the warning’s meaning online.

However, 25 per cent indicated they would head directly to an auto repair shop. Just 9 per cent said they would continue driving, hoping the issue would resolve itself.

A small fraction, 1 per cent, admitted they would ignore the light altogether unless something else seemed wrong.

Ease of symbol recognition

When asked whether they find the symbols on car dashboards easy to understand, the responses revealed that nearly half of the drivers struggle with symbol recognition.

While 49 per cent of drivers reported finding the symbols easy to understand, 21 per cent admitted they found them confusing, and 30 per cent were unsure whether the symbols were clear or not.

Ignoring warning lights

Regarding the likelihood of ignoring a warning light, a significant portion of drivers admitted they might overlook such alerts.

While 77 per cent of respondents said they were unlikely to ignore a warning light, showing some level of responsibility, 15 per cent admitted they were somewhat likely to do so, and 8 per cent said they were very likely to dismiss it outright.

The survey also revealed that nearly a third of drivers have ignored a warning light at least once. Specifically, 29 per cent of respondents admitted to having ignored a warning light, while 59 per cent claimed they had never done so, and 12 per cent were unsure if they had.

Among those who previously admitted to ignoring a warning light, a significant portion cited fear of repair costs as their primary reason. Specifically, 29 per cent said they ignored the warning light due to concerns about the potential costs involved.

Additionally, 26 per cent of drivers admitted they did not understand what the warning light meant, while 21 per cent said their car was still functioning normally, so they chose to carry on. Meanwhile, 19 per cent of drivers felt confident they knew what the warning meant and believed it was safe to continue driving, and 5 per cent were unsure of why they ignored the warning.

Image credit: Depositphotos.com

The post The gaps in dashboard warning light knowledge appeared first on Auto Service World.

With human error accounting for more than 90 per cent of road traffic accidents, the push toward autonomous vehicles is gaining momentum as a crucial measure to enhance road safety.

Car manufacturers are also feeling compelled to adopt advanced technologies to remain competitive as self-driving technology progresses. A recent report by IDTechEx, “Autonomous Cars, Robotaxis and Sensors 2024-2044,” looked at the future of the market for the next two decades, highlighting where there’s potential for these technologies to revolutionize driving.

It noted that Level 0, no automation, is virtually obsolete. In 2022, more than half of all vehicles in the United States were equipped with Level 2 autonomy, which includes features such as adaptive cruise control and lane-keeping assistance. But most Level 2 systems still require drivers to pay attention and keep their hands on the wheel. The report pointed out that Tesla, General Motors and Ford are at the forefront of this technology, with Tesla producing all of its models with Level 2 capabilities.

Many major automakers now offer these features as either standard or optional, often alongside automatic emergency braking.

The ultimate goal is Level 5 autonomy, where vehicles will operate entirely without human intervention. At this point, the technology would eliminate the need for steering wheels, pedals or any conventional controls, transforming drivers into passengers.

In 2023, Ford received approval to deploy its Level 2-plus BlueCruise hands-free technology on roads in Germany and the U.K., though its use is currently restricted to specific motorway sections. Simultaneously, Volkswagen has been integrating Mobileye’s Road Book technology, which leverages data collected from Mobileye-powered vehicles to create high-definition maps. These maps support more advanced Level 2 advanced driver assistance systems (ADAS) and lay the groundwork for future higher levels of autonomy.

In some parts of Europe, the U.S., and China, Level 3 autonomy is beginning to emerge. This level allows drivers to take their hands off the wheel and focus away from driving under certain conditions. Honda introduced the first Level 3 vehicle in Japan in 2021, and the Mercedes-Benz S-Class with Level 3 features is now available in Germany and select U.S. states. However, safety remains paramount, with these vehicles typically limited to speeds around 40 mph and requiring drivers to reengage with 10 seconds’ notice.

While Level 3 technology represents the cutting edge of consumer automotive tech, some cities have already introduced Level 4 autonomous transportation. Robotaxis, which operate without a human driver, are providing ride-hailing services in select U.S. and Chinese cities. According to IDTechEx, there is now a viable path for the widespread deployment of Level 4 vehicles.

However, IDTechEX noted that Level 4 technology for privately owned vehicles is still far from realization, as both the industry and regulators must first become more comfortable with Level 3 systems.

Autonomous vehicles are making continuous, steady advancements, yet they still encounter obstacles like uncertainty around liability in driver-free operations and reluctance from lawmakers

“But persistence will be rewarded, as autonomous vehicles are expected to bring a newfound safety to roads worldwide, ultimately preventing all collisions caused by driver error,” the group said, noting that it may take 15-20 years for this level of autonomy to become widespread.

Image credit: Depositphotos.com

The post How autonomous technology is trending appeared first on Auto Service World.

It’s been a strong run of year-over-year increases in the new vehicle sales market but one industry observer is concerned about how much longer the pace can continue as indicators point to an uncertain future.

June was the only month with a dip in the last 22 months — it’s dead even total in 2024 with 2023 being the only time there wasn’t growth.

But the bar has been fairly low to jump over — pandemic-related issues suppressed sales, so a return to normalcy in supply, demand and consumer confidence easily helped the market rebound.

While numbers rebounded above pandemic stats, they still sit below pre-pandemic data. And while August 2024 new vehicle sales were up compared to the same time last year — DesRosiers Automotive Consultants reported growth of 5.6 per cent, with an estimated 165,000 units sold — we’re still below the pre-pandemic average of over 180,000 units for August.

The seasonally adjusted annual rate (SAAR) for August 2024 reached 1.81 million units, the highest since the first quarter of 2024, when pent-up demand surged.

But will these good times last? Good times, compared to recent data, anyway. The consultancy isn’t quite sure.

Andrew King, DesRosiers’ managing partner, noted that sustaining significant percentage gains will be challenging.

“The final four months of 2023 saw improved inventory and an uptick in sales pace,” King said. “The SAAR consistently exceeded 1.8 million, setting tougher benchmarks for this fall.”

King also highlighted rising unemployment, declining GDP per capita, and high vehicle prices as factors contributing to the uncertain outlook for the coming months. Corporate performances varied widely in August, with some companies facing declines while others set new sales records.

Image credit: Depositphotos.com

The post How much longer can new vehicle sales go up? appeared first on Auto Service World.

Canadian vehicle owners are facing rising costs for maintenance and repairs as inflation continues to impact the automotive aftermarket.

The J.D. Power 2024 Canada Customer Service Index—Long-Term (CSI-LT) Study found that the average cost of a dealership visit has climbed to $465, up from $432 a year ago, a 7.6 per cent jump. Similarly, visits to independent shops have increased, but at a lower rate to $273 from $262, up 4.2 per cent.

The study observed that macro-economic conditions and higher interest rates are not only driving up costs but also prompting owners to keep their aging vehicles longer. According to the study, 40 per cent of visits to dealerships and 24 per cent of visits to aftermarket shops were for repairs, compared to 31 per cent and 21 per cent, respectively, in 2021.

This trend, J.D. Power noted, indicates that more owners are choosing to invest in repairs rather than purchasing new vehicles.

“With inflation pushing auto repair costs upward and interest rates making larger-ticket items like mortgage payments and new-vehicle purchases more expensive, owners are being hit with a ‘double whammy’ and have to make different decisions in order to balance their budgets,” said J.D. Ney, automotive practice lead at J.D. Power Canada. “As more owners opt to fix their vehicle instead of buying a new one, auto repair shops have an opportunity to attract more lucrative business in this $13 billion market by excelling in the service factors that drive customer satisfaction, mainly saving time and convenience.”

The study also noted that saving time and convenience are key factors affecting customer satisfaction. Completing service within 90 minutes and a speedy send-off, including paperwork and key pick-up, are the two performance indicators that have seen the most significant increase in importance year over year.

Dealerships continue to dominate the auto service and repair market, holding nearly half (48 per cent) of the market share. Independent shops and quick lube locations capture 27 per cent and 11 per cent, respectively. These market shares have remained almost unchanged from 2023, the report noted.

Average annual visits also remain steady, with 1.6 visits per year in the dealership segment and 1.3 in the aftermarket segment, up from 1.2 in 2023.

With an average cost of $465 per visit, dealerships account for 61 per cent of the auto service market’s total revenue, while the aftermarket segment captures the remaining 39 per cent. These proportions have remained consistent since 2023.

On a 1,000-point scale, Great Canadian Oil Change (838) ranked highest among aftermarket service facilities, followed by Jiffy Lube (834) and Midas (813).

Image credit: Depositphotos.com

The post Inflation drives up auto maintenance costs in Canada appeared first on Auto Service World.

If you’re trying to better understand your customers and you know they’re into smart home technology, then they may be interested in an electric vehicle.

As electric vehicles continue to gain traction, a recent study from research and consulting firm Parks Associates found a growing trend among EV owners: A strong inclination toward adopting smart home technologies.

According to Parks Associates’ study, EV Charging at Home: User Demand and Preferences, 72 per cent of EV owners have integrated at least one smart home device into their households, significantly outpacing the 44 per cent adoption rate among non-EV households.

The study also looked at EV ownership, including charging locations, equipment preferences, user experience and future expansion plans.

Daniel Holcomb, Senior Research Analyst at Parks Associates, noted that while charging can be a stress point for EV owners, they are increasingly interested in tech solutions that coordinate energy usage, reduce costs, and conserve resources.

“The majority of EV owners find it highly valuable to have EVs coordinating with other devices for charging,” Holcomb said, “and 34 per cent are even willing to allow utilities to adjust charging times during peak energy demand.”

Some companies have developed home energy management systems that integrate EV charging with other home appliances. Some products are designed to work within a complete home energy management ecosystem, offering a solution for managing household energy.

Partnerships are also playing a key role in advancing this trend. In December, Resideo and Ford announced the EV-Home Power Partnership, which integrates EV charging with smart home systems. This collaboration aims to synchronize energy usage across various home devices, enhancing efficiency and cost management.

Holcomb believes that the future of home energy will be characterized by coordinated and orchestrated systems that leverage demand response technologies, with EVs playing a central role.

“Smart home device manufacturers and EV companies should explore partnerships that create linkages within the home and simplify the management of household energy,” he said.

Image credit: Depositphotos.com

The post EV owners also use smart home tech appeared first on Auto Service World.

While many admit to driving dangerously at times, there’s growing support for measures like speed enforcement.

More than half of Ontario motorists confessed to engaging in risky driving behaviours, with younger drivers being the worst offenders, according to a recent study by CAA South Central Ontario.

The study found that more than 55 per cent of Ontario drivers admitted to participating in unsafe driving practices in the past year, a number that jumps to 61 per cent among younger drivers aged 18 to 34.

These statistics highlight the ongoing issue of dangerous driving on Ontario’s roads, with speeding, distracted driving and aggressive driving topping the list of risky behaviors.

“These actions not only endanger the drivers themselves but also put all road users at risk,” said Michael Stewart, community relations consultant for CAA SCO. “We must prioritize road safety by promoting responsible driving habits.”

The study found that the most common dangerous driving behaviors admitted by motorists are:

1. Speeding: 41 per cent
2. Distracted driving: 20 per cent
3. Unsafe lane changes: 9 per cent
4. Aggressive driving: 8 per cent
5. Running red lights: 7 per cent

In contrast, drivers reported witnessing these dangerous behaviours in others far more frequently:

1. Speeding: 84 per cent
2. Unsafe lane changes: 76 per cent
3. Aggressive driving: 76 per cent
4. Distracted driving: 73 per cent
5. Running red lights: 56 per cent

Stewart noted the disconnect between personal admission and observation. “The data tells us that it is far more prevalent for people to see others driving dangerously rather than admitting that they themselves are carrying out the same behaviour.”

Speeding remains a significant concern for Ontario motorists, particularly on highways with higher speed limits. While 86 per cent of drivers feel safe on residential streets, only 68 per cent report feeling secure on highways with posted speeds of 110 kilometers per hour.

“The risk of collision can increase when travelling at higher speeds,” Stewart noted, pointing out that dangerous driving behaviours are more commonly observed on highways.

The study also highlighted Ontario drivers’ support for stricter penalties to combat dangerous driving. This year, 35 per cent of Ontarians reported that fines and penalties for speeding and stunt driving have influenced their driving behavior — a 7 per cent increase from the previous year.

Despite this, the study found that 40 per cent of Ontario drivers actively avoid roads with Automated Speed Enforcement (ASE) cameras, even though 78 per cent believe that ASE can help deter speeding. Furthermore, 84 per cent of drivers support the presence of ASE near schools, and 81 per cent support it near community centers. However, 17 per cent of Ontario drivers — equivalent to more than 1.5 million people — have received a ticket from an ASE camera.

“It is no surprise that Ontario motorists are in favour of stricter penalties as speeding and dangerous driving continue to be an issue,” Stewart said. “What is surprising, however, is that despite the support for ASE, four out of 10 Ontario drivers will actively avoid roads where an ASE is present, an increase from last year.”

Image credit: Depositphotos.com

The post How many admit to dangerous driving behaviours appeared first on Auto Service World.

With the rising prices of new vehicles, car owners are placing greater emphasis on maintaining their current vehicles. To help, they’re reaching for premium brand products, according to a recent survey.

A survey of 2,000 American car owners, conducted by Talker Research on behalf of Pennzoil, found that 73 percent of respondents are taking better care of their vehicles as new car prices continue to climb. This trend is driving a significant preference for brand-name products in vehicle maintenance, with 57 per cent of car owners opting for well-known brands over private-label alternatives, which only garnered 34 per cent of the preference.

Nathan Shipley, executive director of industry analysis in automotive at Circana, showed data at AAPEX 2023 from the last three years and it all suggested that numbers are flat in the private label area.

“But there’s not some major shift to private label like I think a lot of us would expect as we have gotten into a little bit tougher economic times this year,” he said during his session, Aftermarket Outlook 2024.

He noted that higher-income consumers are frequenting the aftermarket more often. Retailers, he said, need to account for that when thinking about their product offerings.

The survey noted that vehicle maintenance products are among the most regretted private-label purchases, ranking in the top three across all product categories in the past month. This finding further underscores the importance consumers place on trusted, high-quality brands for maintaining their vehicles.

Motor oil, in particular, is a key focus for many car owners, especially those who rely on professionals for maintenance services, known as DIFM (do-it-for-me) consumers. Nearly two-thirds of these consumers are willing to spend more on motor oil to protect their vehicle’s value over time. Brand familiarity plays a critical role in their decisions, with nearly 60 percent of DIFM consumers stating that it influences their purchasing choices.

The survey also found that consumers believe premium brands perform better over time and are more trustworthy compared to private-label products.

“Consumers are recognizing the long-term benefits of investing in premium products for their vehicles,” said Amanda Luce, Pennzoil Brand Manager. “This survey underscores that consumers see the tangible benefits of choosing premium brands … knowing that their investment will help to drive value for their vehicle over time.”

Image credit: Depositphotos.com

The post Private or premium: What car owners are choosing appeared first on Auto Service World.

A dramatic shift in the vehicle market has seen domestic nameplates plummet, making way for the dominance of foreign models, according to Lang Marketing.

There were nearly eight million fewer domestic nameplates in operation during 2023 than 10 years earlier.

“This was caused by the combination of weak new vehicle sales of domestic nameplates and their disproportionate share of the car and light truck annual scrappage,” Lang said in its report, Foreign Nameplates Dominate the Aftermarket.

As the vehicles in operation (VIO) increased by about 15 per cent between 2013-2023 in the United States, domestic nameplates suffered a sharp decline in share. Domestic nameplate cars were hit hard as their VIO share fell from about 20 per cent to less than 12 per cent between 2013-2022, Lang reported.

“The population of domestic nameplate light trucks increased, but their growth did not offset the plunging number of domestic nameplate cars,” Lang observed.

By 2023, domestic nameplates held less than half of the VIO share, down from more than 60 per cent in 2013.

Conversely, foreign nameplates have surged in the past decade. While the domestic nameplate VIO plunged by 8 million between 2013-2023, foreign nameplates jumped by about 44 million. Never has such a sharp and profound shift occurred in the nation’s nameplate mix of vehicles on the road, according to Lang.

“The light vehicle aftermarket has been rocked by the dramatic shift in the VIO’s nameplates from domestic to foreign models,” Lang’s report said. “This change had a direct and significant impact on the nameplate mix of aftermarket product sales.”

Foreign nameplates topped 5.5 per cent annual product volume growth between 2013-2023, while domestic nameplates fell by 0.1 per cent in annual product sales.

Lang pointed to the market-leading sales growth of repair specialists and foreign specialists to exemplify the rapid expansion of the foreign nameplate aftermarket.

“These two major outlet groups generate a preponderance of their business from foreign nameplates and, as a result, their combined growth has greatly outpaced the overall do-it-for-me (DIFM) market over the past 10 years,” Lang said.

Following COVID-19, the aftermarket has rebounded from the historic decline it suffered in 2020. Foreign nameplates have led the recovery and generated virtually all aftermarket product volume growth between 2021-2023, Lang observed. It projected that foreign nameplate product sales will climb at more than double the yearly pace recorded by the overall light vehicle aftermarket during 2024 and 2025.

“DIFM and DIY aftermarket product growth, the strength of five major types of brands sold in the aftermarket, and other aftermarket sectors have been impacted significantly by the historic migration of the VIO’s nameplate mix from domestic to foreign models,” Lang said. “The aftermarket impact of this nameplate shift will continue and even intensify in the coming years.”

Image credit: Depositphotos.com

The post Foreign brands dominating U.S. market appeared first on Auto Service World.

Image credit: Depositphotos.com

As e-commerce heats up, a new study shows that high delivery costs and complicated checkout processes are driving shoppers to abandon their carts, underscoring the critical need for retailers to perfect their delivery game.

A new consumer study conducted by Retail Week in partnership with nShift highlighted the critical role of delivery in the success of e-commerce retailers. The study, Shopper Unlocked: Inside the Minds of 1,000 Consumers, found that 95 per cent of shoppers have abandoned a shopping basket at some point. High delivery costs are the leading cause, with 62 per cent of shoppers citing this as their reason.

Complicated checkout processes were blamed by nearly a quarter (23 per cent) of shoppers, while around 20 per cent pointed to poor delivery timeframes and unsatisfactory return policies as key issues.

Customers highly value convenience in their shopping experience, with nearly two-thirds (63 per cent) of respondents indicating that the ability to choose the time and date of delivery is very important. Additionally, 62 per cent of shoppers stated they would not purchase again from a retailer after a single bad delivery experience.

David Carey, senior vice president of customer experience at nShift, emphasized the importance of flawless delivery experiences.

“These results hammer home just how little patience most consumers have for bad delivery experiences — and how important it is for retailers to get deliveries right every time,” he said in the announcement about the survey findings. “As we move into the second half of the year and the peak shopping season, the most successful retailers are likely going to be those that focus on delivery and experience management as a business-critical point of difference.”

To help retailers prepare, nShift offered five key tips:

1. Offer a broad range of delivery choices: Retailers must provide a variety of fulfillment options, including different delivery costs, times, and locations. Doing so can increase conversions by 20 per cent.
2. Clearly communicate on returns: While free returns are popular among shoppers, they may not be feasible for all retailers. Regardless of the policy, it must be clearly communicated and prominently displayed on the website.
3. Use returns to your advantage: Returns are inevitable during peak periods, but with efficient processes, retailers can convert up to 30 per cent of returns-related refunds into exchanges and repeat business.
4. Take ownership of the post-purchase experience: The relationship with the customer does not end at checkout. Personalized communications, branded messaging, and real-time tracking can enhance the post-purchase experience, fostering customer loyalty and repeat purchases.
5. Ensure your core delivery management capability is up to scratch: Retailers need multi-carrier capabilities to ensure transport capacity during busy periods and offer the range of delivery options that shoppers seek, including local pick-up points.

“Customers expect delivery to be sculpted around their lifestyle,” Carey said. “It will be no different as peak season draws near. Being match-fit for peak season depends on taking the right steps now, so retailers can truly differentiate through deliveries.”

The post What you need to ace if you want to win customers appeared first on Auto Service World.

Image credit: Depositphotos.com

Used car prices continue to decline as availability increases and new car prices have stabilized in the Canadian automotive market, according to analysis from AutoTrader.

The Canadian automotive market has experienced notable shifts in both the used and new car segments as used car prices continue to soften and new car prices eased their upward trend over the last few months.

Starting in the third quarter of 2023, the demand for used cars began to soften year-over-year, the AutoTrader Price Index for June reported. Along with the decrease in demand, an increase in used car supply — credited to strong new car sales and trade-ins — has led to a decline in used car prices. In June 2024, the average used car price dipped by 1.1 per cent from the previous month, settling at $36,342, an 8.3 per cent decrease compared to the same period last year.

That’s a higher decrease than reported by DesRosiers Automotive Consultants, which reported a 4.5 per cent drop in purchase price of passenger vehicles in June 2024 compared to June 2023.

New car prices, meanwhile, have shown stability since the beginning of the second quarter of 2024. Average new car prices in June were $66,807, a 0.8 per cent increase year-over-year.

AutoTrader noted that the stabilization of new car prices is thanks to manufacturers bringing back incentives, including more competitive interest rates, making new vehicles more affordable. In June, AutoTrader reported, interest rates on new car loans dropped to 5.3 per cent, down from 6.2 per cent in November 2023.

And interest rate cuts have helped as well. As more cuts are expected — two or three more before the end of the year — AutoTrader expects to see a boost in sales in the second half of 2024.

Demand for new vehicles should be met by adequate supply, AutoTrader expects. The group noted that ongoing pent-up demand from the pandemic will lead to gains in subsequent months.

AutoTrader’s Vehicle Affordability Index, which measures affordability in relation to average weekly wages, showed improvements in both new and used car segments. As of June 2024, it takes 29 weeks of average earnings to purchase a used vehicle and 54 weeks for a new one. It noted that these figures are higher than what was seen pre-pandemic, they’re down from 34 weeks for used cars and 56 weeks for new vehicles

BEV update

Prices for battery electric vehicles (BEVs) continued to drop, down year-over-year 14.7 per cent for new BEVs and 13.7 per cent for used ones.

That’s being driven by greater BEV inventory — AutoTrader reported that its website has seen a combined 109.4 per cent year-over-year growth for new and used BEVs. But there’s been a decline in demand, with EV purchase consideration dropping from 68 per cent in 2022 to 46 per cent in 2024.

Looking forward, used car prices are expected to continue normalizing, while new car prices are likely to remain stable, AutoTrader reported. The group believes vehicle prices for both new and used cars likely peaked in 2023 and a return to pre-pandemic levels is not anticipated in the near future due to various factors.

The post How new, used vehicle prices are trending appeared first on Auto Service World.

Image credit: Depositphotos.com

For the first time in two years, dealer inventory of new vehicles saw a decline.

Cloud Theory, a provider of real-time automotive data insights for manufacturers, agencies and affiliates, reported a decrease for August. This marks the first pullback — excluding typical seasonal declines from December to January — that the industry has seen in two years.

The report also highlights a range-bound demand picture, with diagnostic numbers indicating that turn rates have remained steady in the mid-to-high 30s for the past seven months. Average marketed pricing has held steady for three consecutive months, but market adjustments, which measure consumer-visible discounts and incentives, continue to increase.

“Our numbers have been pointing to a slowdown in supply growth, and it was inevitable that the industry would eventually reach a ceiling,” said Rick Wainschel, vice president of data science and analytics at Cloud Theory. “

The post New vehicle inventory sees decline appeared first on Auto Service World.

Image credit: Depositphotos.com

It will be a long time until electric vehicles equal the number of internal combustion engine ones on our roads but a recent industry expert gave his best guess to try and narrow down a window.

With about 1 per cent of the share of vehicles in operation, EVs don’t make up too many vehicles on roads today. So the automotive aftermarket doesn’t need to worry too much about them just yet, noted Todd Campau, aftermarket practice lead at S&P Global Mobility.

“EV sales have slowed. I would not say they’re shrinking, but they are not growing at the rate that we’ve been used to,” he said during the Three Dragons session at this year’s MEMA Aftermarket Suppliers Conference in Detroit. “They’re still coming. This is normal. Don’t get too concerned about it just yet, but it certainly slowed a little bit.”

Beyond the fact that there’s a relatively small share of EVs, they’re also very young.

So to answer the question of how long until both vehicle types are on a level playing field, he looked at another automotive trend that has taken place over the last couple of decades.

“So I compare this to the shift from passenger cars to light trucks. Twenty years ago, passenger cars dominated the vehicle fleet at a rate of about 57 to 43 [per cent],” he explained.

Over the next few years, the gap narrowed and got closer to 50-50. It was around 2012 when we reached the point where light trucks took off and now passenger cars make up only a third of the vehicle fleet.

Bottom line: It’s going to take a long time for EVs with 1 per cent market share to get to about half.

“Even if you’re going to sell all EVs tomorrow, it will take us a decade or more to get to 50 per cent,” Campau said. “We’re not selling 100 per cent of these tomorrow. So there’s a long time for your internal combustion parts to [satisfy] the market.”

When pressed for a year, Campau pointed to 2045 as the earliest date for parity. That’s 21 years away. There are 300 million vehicles in the U.S. right now — that means 150 million vehicles or more will be sold in the next 20 years.

What’s stopping it from happening sooner? Prices are a major stumbling block.

“With the price of an EV, we already know that the majority of new vehicle purchases … are purchased by upper-income households. That’s only going to get worse with electric vehicles,” Campau said.

However, prices are also going up for new ICE vehicles. So if prices stay out of reach, that’s continued good news for the aftermarket.

“So you’ve got a whole segment of the marketplace that literally cannot afford some of these prices,” he said. “And so I think we could see elongation of the lifecycle in the ICE fleet. So I think we’re probably 20 years away [from EV parity].”

The post How long until we see as many EVs as ICE vehicles? appeared first on Auto Service World.

Image credit: Depositphotos.com

In an age dominated by digital interactions, most car buyers still find value in visiting physical showrooms, according to new research.

Despite the rise of digital customer journeys, nearly three out of four (74 per cent) car buyers still value visiting car showrooms, according to the latest research from OMODA, a brand of Chinese automaker Chery Automobiles.

The research found importance of physical showrooms in the automotive purchase process, while also highlighting how these spaces can evolve. Among the most valued showroom features are test drives, with 64 per cent of buyers still wanting a hands-on experience with the vehicle. Two in five respondents expressed interest in virtual test drives for future showrooms.

If there was a feeling that the traditional showroom would meet its demise, the research found that these locations remain a crucial part of the car buying journey.

The research also found that almost half (43 per cent) of car buyers value salespeople with in-depth knowledge. This is especially true for those looking to purchase EVs, with 24 per cent saying that speaking to a knowledgeable expert about their local charging infrastructure was vital.

When asked about their biggest dislikes in the showroom experience, 61 per cent of respondents cited pressure from sales staff, 47 per cent mentioned feeling rushed and 46 per cent were concerned about hidden costs.

As for the future showroom, beyond virtual test drives, more than half (52 per cent) of respondents wanted interactive digital displays and 48 per cent sought tech support areas. Additionally, more than one in five (22 per cent) desired AI or robot sales assistants, and 60 per cent would find in-showroom training in car technology useful.

The post Car buyers still value showrooms appeared first on Auto Service World.

Image credit: Depositphotos.com

A cheeky new ad campaign from Midas is warning vehicle owners about bad service (B.S.) from their auto repair professionals.

The Don’t Put Up With B.S. — the B.S. meaning ‘bad service’ — campaign comes after the company surveyed 2,000 people across North America and half of the respondents saying they’ve experienced bad service in auto care. Two-thirds reported that they’ve been mistreated in a repair shop at least once — they felt pushed into unneeded services, that they were being ripped off or pressured.

“We know that consumers are fed up with the bad service they experience in the auto care industry, and we’re not shying away from this problem, we’re tackling it head-on,” said Lenny Valentino, Jr., president and chief operating officer of Midas, which has nearly 2,100 franchised and licensed locations in 20 countries. About 1,200 of those locations are in Canada and the U.S.

The company recently rolled out a new training program for franchisees and their employees, outlining how shops can be better partners with customers, provide straightforward information — like what needs fixing now and what can wait — and work together to problem-solve car care solutions.

It’s new campaign will include a series of ads across streaming services, digital channels and social media. Out-of-home-boards in Toronto, Vancouver and other U.S. cities will also feature the campaign.

“The campaign conveys examples of the bad service consumers have faced in the auto repair industry, like being talked down to or forced to urgently make a decision, with humour and a call to inspire real change,” the announcement from Midas said.

The post New campaign urges customers to not ‘put up with B.S.’ appeared first on Auto Service World.

The Barbie car at the 2024 Canadian International AutoShow in Toronto

New research looked at the biggest car-loving communities worldwide, with Toronto taking second place.

Austin, Texas, claimed the No. 1 spot, followed by Toronto and Cape Town, South Africa. Edmonton, also landed among the world’s top 15, finishing 11th, according to Auto Trader.

The research analyzed the number of car meets, auto events and motor shows in more than 400 cities worldwide, along with the number of Instagram posts associated with each city’s car meets, to show how strong the car-loving community presence is in each location.

Austin hosts major events such as the Formula 1 United States Grand Prix and the MotoGP Red Bull Grand Prix of the Americas. The city also has car clubs and dozens of car meets that push it to the top of the list for the biggest car community spirit.

Toronto’s car scene presence on social media is what propels the city into second place. According to Auto Trader, the hashtag #torontocarmeets recorded nearly 49,000 Instagram posts.

The top 15 were ranked as follows, with their scores:

• Austin, USA, 98.1
• Toronto, Canada, 95.4
• Cape Town, South Africa, 95.2
• Turin, Italy, 76.1,
• Munich, Germany, 68.1
• London, U.K., 61
• Warsaw, Poland, 58
• Frankfurt, Germany, 57.1
• Sydney, Australia 1
• Christchurch, New Zealand 41
• Edmonton, Canada, 39.3
• Wolverhampton, U.K., 38.6
• Geneva, Switzerland, 38.1
• Stuttgart, Germany, 38.1
• Pretoria, South Africa, 29.3

“In today’s digital age, it’s encouraging to see how many petrolhead communities thrive across the globe, allowing motor lovers to connect in person and show off their wheels,” said Rory Reid, YouTube director at Auto Trader. “From the annual Oktoberfest car meetups in Munich to the vibrant car scenes in Pretoria, each city offers unique events that bring enthusiasts together. This shows how, for many people, their cars are more than a means of transportation and in fact, act as an expression of individuality and a source of passion. Whether you’re from Christchurch, New Zealand or London, England, the car community truly is a place that fosters friendships.”

The post Toronto a top car-loving city appeared first on Auto Service World.

After a lackluster performance in June, July light vehicle sales in Canada bounced back.

Sales were up 11 per cent compared to 2023 levels during the same month. The gain was anticipated given the weak performance in July 2023 and a flat June 2024 due to a software outage, noted DesRosiers Automotive Consultants. The recovery is seen as a positive indicator for the market, it noted.

Despite the boost, overall sales for July 2024 were estimated at 161,000 units, which is still below the 170,000-185,000 units typically seen in pre-pandemic Julys.

Andrew King, managing partner at DesRosiers, noted the varied performance among automakers.

“What was of note in July was that performance varied widely by vehicle company, with some players recording sales declines while others enjoyed truly remarkable sales success,” he said.

The seasonally adjusted annual rate (SAAR) for July came in at 1.77 million — higher than any month in the second quarter but lower than all months in the first quarter. The back-and-forth, the consultancy noted, highlights the ongoing instability in the market. Analysts will be keeping an eye on how August will perform to gauge if stability will return.

This performance comes off a flat June performance, a disappointment after several months of strong gains. The optimism for July was partially fueled by the expectation of deferred sales due to the June software outage and a weaker comparative month in 2023.

Automakers have faced numerous challenges, including supply chain disruptions and fluctuating demand tis year. However, the July sales boost suggests a potential turning point. Notably, the report emphasized that while some manufacturers struggled, others capitalized on the market conditions to achieve significant sales increases.

The post July vehicle sales show promising recovery appeared first on Auto Service World.

Image credit: Depositphotos.com

As distracted and drug-impaired driving fatalities climb, the Traffic Injury Research Foundation (TIRF) is sounding the alarm on urgent road safety challenges in two revealing new reports.

In Distraction-Related Fatal Collisions, 2000-2021 and Drug Use in Fatal Collisions, 2000-2021, funded by Desjardins Insurance, findings from TIRF’s National Fatality Database emphasize the urgent need to tackle these road safety issues.

“Although distracted driving-related fatalities have declined over the years, the percentage of all fatalities attributed to distraction has increased,” said Steve Brown, TIRF research associate. “The data also highlights a troubling rise in drug-related road deaths, with a significant increase in fatalities where at least one driver tested positive for drugs.”

The data showed that distraction-related fatalities rose to 28.8 per cent in 2021 from 19.1 per cent in 2000. Younger drivers (16-19 years old) and older drivers (65 and older) were the most likely to have been distracted, with percentages at 20.6 per cent and 20.4 per cent, respectively. During the same period, commercial vehicle drivers were nearly twice as likely to be distracted compared to motorcyclists (25.6 per cent vs. 13.1 per cent) and more so than drivers of automobiles (16.5 per cent) and light trucks (17.5 per cent).

In 2021, there were 359 fatalities in crashes where at least one driver was distracted, down from 458 in 2000. Despite the decrease in absolute numbers, the proportion of road fatalities due to distraction rose to 28.8 per cent in 2021 from 19.1 per cent in 2000. This indicates that while overall road safety may have improved, distracted driving remains a persistent issue, requiring targeted interventions.

Drug-related fatalities have also seen a dramatic increase. In 2021, there were 496 fatalities in crashes where at least one driver tested positive for drugs, compared to 230 in 2000. The percentage of drug-related traffic fatalities jumped to 37 per cent in 2021 from 10.7 per cent in 2000. Since 2013, collisions involving a drug-impaired driver have surpassed those involving alcohol, distraction, or other factors. Drivers aged 20-34 had the highest percentage of positive drug tests at 61.1 per cent, highlighting the need for focused education and enforcement among this demographic.

Interestingly, drug-related fatalities were less common in vehicles with multiple occupants than those with a single occupant, suggesting that drivers with passengers might feel more responsible for their safety. Conversely, distraction-related fatalities were higher in crashes involving vehicles with multiple occupants, indicating a need for increased passenger education about the dangers of riding with distracted drivers.

“Understanding the nuances of distracted and drug-impaired driving can help tailor enforcement and education efforts to better reach target audiences,” says Ward Vanlaar, TIRF’s chief operating officer. “General messages may not be effective, especially if people don’t recognize their distraction or impairment. Additionally, educating passengers about the risks of riding with distracted or impaired drivers needs more emphasis and reinforcement.”

The post The rising threats of distracted, drug-impaired driving appeared first on Auto Service World.

Image credit: Depositphotos.com

Electric vehicle news has been bleak in early 2024, with reports of a market downturn and OEMs scaling back plans. This might suggest EVs are beyond their hype, but a closer look from IDTechEx might point to a different story.

From 2015 to 2023, electric car sales showed robust growth, even during the COVID-19 pandemic. James Edmondson, research director at IDTechEx, noted that his group’s research found that EV sales have averaged 50 per cent growth annually, with a 38 per cent increase from 2022 to 2023.

The International Energy Agency (IEA) reported a 20 per cent decrease in EV sales in Q1 2024 compared to Q4 2023, but this is part of a consistent trend of lower Q1 sales each year.

Notably, Q1 sales have increased year-on-year, with a 30 per cent rise in Q1 2024 compared to Q1 2023. Electric car sales have also increased in all regions compared to the same period last year.

While EV sales growth has slowed, this is expected as the market matures, Edmonson pointed out.

“It is not possible to have exponential growth forever; the sales of EVs are growing into an existing (and limited) automotive market,” he said.

Despite strong growth, media reports often highlight the downturn, making failure seem more newsworthy than continued success, Edmonson observed. Some production and component scalebacks are due to overinvestment and slower-than-expected growth rates, coupled with automakers striving to make their EV platforms more profitable.

That said, he pointed out that legitimate concerns remain about further EV adoption. One major limitation is the lack of affordable EV models. Although some EVs are available at or below the average car price, electric versions are often more expensive than their combustion counterparts, with few options below $35,000 in western markets.

Charging infrastructure also plays a critical role in consumer adoption, Edmonson noted. Most EV owners charge at home overnight, but the sight of closed public chargers can be off-putting. Innovations like chargers in lamp posts and parking garages are emerging, but widespread adoption depends on housing providers, authorities, and charging network providers to install and maintain these systems. Consumers without access to a driveway or garage face significant hurdles and are more likely to need lower-priced vehicles, which are still scarce, he said.

“Despite the above concerns, EV sales continue to grow, and impending combustion engine bans are unlikely to be pushed further back,” Edmonson explained. “Demand is still present, but lower upfront cost models need to be available to fully address the automotive market’s potential.”

The post Why the EV downturn may not be as expected appeared first on Auto Service World.

Image credit: Depositphotos.com

Many drivers are navigating the roads without a clue about essential car maintenance, according to a recent survey.

Uswitch, a comparison website for personal services like car insurance, released a survey that highlighted a trend of neglect that could lead to costly repairs and safety hazards.

A majority (67 per cent) of drivers said they’re unaware of how to check their car’s battery health, with about one in five (22 per cent) checking their battery before a long drive. Given that battery issues a the leading cause of breakdowns, Uswitch noted this lack of knowledge as particularly concerning.

The survey also revealed that almost two in five (37 per cent) drivers don’t know how to check if their exterior lights are functioning and 61 per cent fail to do so before a long trip.

More than a third (37 per cent) of drivers admitted they are clueless about checking tire tread depth, a critical factor for road grip and safety.

A quarter (25 per cent) of drivers also confessed they don’t know how to check their car’s oil level. Regular oil checks are essential for engine health, preventing friction between metal parts and ensuring the engine remains cool and clean.

When it comes to seeking car maintenance advice, 41 per cent of drivers said they turn to friends and family. YouTube is the most popular online resource, used by 32 per cent of drivers for its visual tutorials.

The post The gaps in car maintenance knowledge appeared first on Auto Service World.

Image credit: Depositphotos.com

With the rising cost of living impacting Canadians’ ability to afford transportation, a recent survey found significant shifts in consumer behaviour and preferences in the automotive market.

A recent Léger survey commissioned by Toyota Canada found that 59 per cent of Canadians find vehicle ownership less financially achievable today compared to their parents’ generation. This sentiment is even stronger in British Columbia, where over two-thirds of respondents feel the financial pressure acutely.

As a result, 66 per cent of Canadians have changed their approach to vehicle ownership in the past year, opting to delay purchasing new vehicles (31 per cent) or choosing used vehicles instead (27 per cent). Younger drivers, aged 18-34, are particularly impacted, with 31 per cent preferring used vehicles, compared to 23 per cent of those aged 55 and older.

“At a time when Canadians are grappling with financial pressures, how to best spend their automotive dollars for long-term value becomes even more important,” said Stephen Beatty, vice president of corporate at Toyota Canada. “This decision goes beyond the new car purchase to consider operating and maintenance costs as well as resale value down the road.”

In response to these findings, Beatty emphasizes the importance of automakers focusing on delivering high value throughout the ownership lifecycle.

Furthermore, most (56 per cent) of Canadians are addressing affordability concerns by either cancelling or delaying at least one major purchase. The most affected areas include travel (34 per cent), personal vehicles (21 per cent), and home renovations (20 per cent). Alberta (66 per cent), Manitoba and Saskatchewan (61 per cent), and British Columbia (58 per cent), report the highest percentages of delayed purchases.

The post Rising costs prompt Canadians to rethink vehicle ownership appeared first on Auto Service World.

A sense of normalcy is returning to the Canadian market and the automotive sector stands to benefit, according to an industry observer.

Speaking at AIA Canada’s National Conference in April, Todd Campau gave an optimistic yet cautious outlook on the Canadian economy and its impact on the automotive aftermarket sector.

The aftermarket practice lead at S&P Global Mobility noted that Canada is gradually emerging from the challenges brought on by the pandemic.

“In general, Canada is starting to come out of a lot of the pandemic-era issues. It’s not back to normal. But we’re starting to see normal factors are beginning to drive the business again,” Campau said.

The supply chain is showing signs of recovery. While issues such as unemployment persist, Campau suggested that Canada might be slightly ahead of the U.S. in overcoming these economic hurdles.

“We’re starting to see inflation in Canada softening. We’re starting to see the GDP return part of normal. All in all, I think it’s good,” he added.

Canada has seen two interest rate cuts recently, dropping the lending rate to 4.5 per cent. The improving economic conditions have positive implications for the aftermarket sector but Campau warned that the labour market continues to be tight.

“But it seems like we’re getting back towards normal behaviour. And so I think that’s good for the aftermarket,” Campau said.

However, he acknowledged that inflation and high costs remain ongoing concerns. That said, these factors can benefit the aftermarket by delaying new vehicle purchases, leading consumers to repair their existing vehicles.

“If they’re delayed in vehicle purchases, people have to repair the vehicles in their driveway now,” Campau explained. “We are happy to help with that as the aftermarket.”

Turning to new vehicle sales in Canada, Campau observed a slow but steady progress toward pre-pandemic levels. “We’re not back to the pre-2020 models, but we are moving in the right direction,” he said.

Campau expressed confidence that Canada could surpass the two million unit sales threshold again in three to four years. In a follow-up after the conference, he was what would be key factors to driving new vehicle sales back to a point not seen since 2017.

“I think it is the confluence of all the factors: More of a return to normal market drivers, lowering exchange rates, reduction in inflation and interest rate costs reducing,” he told Auto Service World. “I think all of those factors combined will serve as the catalyst for the return toward two million sales, potentially additional acceptance of EVs too and some lower cost options coming to market.

Campau doesn’t think pent-up demand will be a driving force behind increased sales, “but rather a return to a more ‘friendly’ economic environment for new vehicle sales.”

Yet, this recovery is not without its challenges.

“It has been a little bit slow in coming. This is not unique to Canada. This is the story across the board,” Campau noted during the session, referring to similar trends in the U.S.

Campau emphasized the delicate balance of factors that influence the aftermarket.

“One of the things that I think I personally learned is that it’s such a confluence of factors that drive the aftermarket. And maybe uniquely so because we repair the vehicle for its whole life cycle,” he said.

The current trajectory is promising, but the situation remains fragile, Campau warned. “If we see big inflation, if we see big unemployment happening again, if costs stay high, this could get muted.”

Image credit: Depositphotos.com

The post How Canada’s economy will impact the aftermarket appeared first on Auto Service World.

Image credit: Depositphotos.com

As the world increasingly embraces e-commerce, a research and advisory firm is predicting a sharp rise in global online retail sales by 2028, emphasizing the need for retailers to refine their omnichannel strategies.

But Canada may not grow as quickly due to some bigger hurdles than other countries, specifically the U.S.

Forrester predicted that total global online retail sales will grow from USD$4.4 trillion in 2023 to $6.8 trillion by 2028, reflecting an 8.9 per cent compound annual growth rate (CAGR). The report, Global Retail E-Commerce Forecast, 2024 To 2028, provided a five-year forecast for total, online and offline retail sales across 40 countries around the world.

Despite the substantial growth in e-commerce, the report indicates that 76 per cent (or $21.9 trillion) of global retail sales will still occur offline in 2028. Consequently, retailers must continue investing in omnichannel strategies to ensure a seamless shopping experience both online and offline.

The report further highlights the varying maturity levels of retail e-commerce globally. Advanced economies like the U.S., the U.K. and South Korea exhibit more maturity due to higher internet penetration and digital literacy. However, as smartphone adoption and mobile commerce become more widespread, emerging markets in Asia Pacific, Eastern Europe, and Latin America are rapidly catching up.

This swift adaptation is reshaping the global e-commerce landscape, offering new opportunities for businesses and consumers alike.

Looking ahead to 2024 and beyond, Forrester anticipates continued growth momentum for online retail sales worldwide. In the Americas specifically, online retail sales in the U.S. are projected to reach $1.6 trillion by 2028, accounting for 28 per cent of total retail sales in the country.

However, e-commerce is more mature in the U.S. compared to Canada, where online retail sales are expected to reach $83 billion by 2028. Forrester’s announcement noted that Canada lags behind the U.S. in e-commerce penetration due to lower population density, a smaller market size, and slower consumer adoption.

In Latin America, online retail sales in the top six countries — Brazil, Mexico, Argentina, Colombia, Peru and Chile — are expected to grow from $109 billion in 2023 to $192 billion by 2028.

“The growth of online marketplaces, social commerce, livestream selling, and direct-to-consumer commerce will accelerate global online retail sales growth over the next five years,” said Jitender Miglani, principal forecast analyst at Forrester. “However, e-commerce maturity and growth opportunities vary vastly by region. Retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately to succeed.”

The post Online retail set for continued growth appeared first on Auto Service World.

Image credit: Depositphotos.com

If the trends in built-to-order vehicles are any indication, Canadians are willing to wait for the vehicles they want.

Amid the semiconductor shortage of 2021-23, a significant trend emerged in the Canadian automotive market: build-to-order (BTO) vehicle purchases. This trend, already popularized by new entrants like Tesla, gained traction as dealer inventories dwindled.

So what’s the area like these days? DesRosiers Automotive Consultants surveyed dealers and consumers to find out.

The group found that Canadian consumers are open to waiting for their vehicles. Only 10.1 per cent of respondents are willing to wait less than a week, while 55.7 per cent are prepared to wait over a month. Notably, 22.6 per cent are willing to wait more than three months. Dealers also see a lasting role for BTO, predicting that by 2030, 45.3 per cent of vehicle sales will be build-to-order, with traditional inventory sales comprising 54.7 per cent.

This shift towards BTO reflects a significant change in consumer behavior and dealer strategy, suggesting a new era in the automotive market.

“Consumers are clearly willing to wait a reasonable amount of time to take delivery of their desired vehicle,” said Andrew King, Managing Partner at DAC. He emphasized that, given efficient supply chains and timely deliveries, extensive on-ground inventory is not essential for meeting consumer demand.

The post Canadians willing to wait for the vehicle they want appeared first on Auto Service World.

Image credit: Depositphotos.com

Retail sales of automotive aftermarket products are up 2 per cent through the first five months of the year but unit demand remained flat.

That said, erratic weather patterns led to a strong January, complicating year-to-date performance as a reliable indicator for the rest of the year, according to Circana’s latest Future of Auto report. As a result, industry performance is expected to slow, resulting in generally flat sales compared to 2023.

“Fundamental consumer behaviour shifts took root at the macro level in 2020 and 2021 and they are still benefitting the retail automotive aftermarket,” said Nathan Shipley, automotive industry analyst for Circana. “While the aftermarket continues to be one of the strongest performing industries tracked by Circana, demand is softening a bit as macroeconomic factors impact consumers across the board.”

He pointed to food prices as being more than 30 per cent higher than in 20019.

“These kinds of dynamics are impacting spending and maintenance behaviour among vehicle owners, particularly the lower income consumers that are more likely to drive older cars and conduct their own maintenance,” he added.

There is minimal growth in average selling prices expected for the auto care sector this year, estimated at just 0.4% in the U.S. This will be driven by both deepening promotional activity and consumer trade-down at the shelf, Circana’s report said. Coupled with flat unit demand, the overall sales revenue of the industry will be impacted.

The largest source of volume growth in the year ahead is projected to be in chemicals, additives, and fluids, which will generate a 2 per cent increase in dollar gains in 2024. Discretionary categories, including products meant to accessorize or clean the vehicle, will be among the worst performers this year.

“The direction of work-from-home trends and new car sales are the two largest factors for the auto aftermarket to watch over the next year,” Shipley said. “The potential for shifts in these trends, combined with softening prices across retail, will make it critical for aftermarket manufacturers and retailers to emphasize their value with consumers as competition heats up for their still financially challenged budgets.”

The post U.S. aftermarket sees flat demand appeared first on Auto Service World.

Image credit: Depositphotos.com

Recent data revealed that Canada is coming out ahead of its southern neighbour in the transition to battery electric vehicles (BEVs).

This trend is particularly evident in the early months of 2024, where provincial incentives and national policies have significantly boosted BEV registrations in Canada.

“Though it has been well reported that buyers in Europe and China have adopted BEVs more quickly than U.S. buyers, the same is true when looking at the U.S. versus Canada,” wrote Stephanie Brinley, associate director of AutoIntelligence at S&P Global Mobility, in an analysis posted online.

She pointed to the provincial incentives in Quebec and British Columbia helping propel a more rapid adoption of BEVs compared to the U.S., where state-level incentives have a less pronounced impact.

From January to April 2024, BEV registrations in Canada surged by 57 per cent compared to the same period in 2023, while plug-in hybrid electric vehicle (PHEV) registrations climbed by 75 per cent. In contrast, the U.S. saw a mere incremental increase of 25,000 more BEVs registered in the first four months of 2024 compared to the same period in 2023, a stark slowdown from the 137,000 unit increase observed from 2022 to 2023.

Canada’s national Incentive for Zero-Emission Vehicles (iZEV) provides a rebate of up to CA$5,000 for eligible EVs. This, combined with provincial incentives in B.C. and Quebec can reduce costs further, with Quebec providing up to CA$7,000 and British Columbia up to CA$4,000 for BEVs, depending on the buyer’s income and vehicle price. Ontario, however, does not offer additional incentives, relying solely on the national program.

However, changes are afoot. Quebec announced it will phase out rebates by reducing the amount offered and fully eliminating them by 2027. In B.C., changes to its rebate program mean 75 per cent of EVs won’t qualify for rebates, dealers said.

Yet, the impact of these incentives is evident, Brinly pointed out. Quebec alone accounted for 50.6 per cent of Canadian BEV registrations through April 2024, while British Columbia contributed 20.6 per cent. Ontario, with no additional incentives, captured only 22.5 per cent despite being the largest vehicle market in Canada.

The situation is quite different in the U.S., where state-level incentives vary significantly. California leads the charge with 34 per cent of U.S. BEV registrations from January to April 2024, thanks to its robust incentive programs and early adoption of stringent vehicle emission rules. Florida, without state-level incentives, still managed to secure 8 per cent of BEV registrations, while Texas, with a modest $2,500 incentive, accounted for 7 per cent.

“In the U.S., the states which offer incentives also have more varied programs, which presumably creates more variability in impact,” Brinley wrote.

California’s BEV registrations represent 21.4 per cent of total vehicle registrations in the state, far exceeding the national average of about 7 per cent. In comparison, Florida’s BEV registrations are closer to the national figure at 6.6 per cent, while Texas lags slightly at 5.2 per cent.

“There are a total of 15 states in the US offering some level of incentive on top of federal incentives, but BEV distribution in the US does still generally see the highest volume states in overall registrations also being the top BEV states,” Brinley wrote.

The post How much Canada is outpacing the U.S. in EVs appeared first on Auto Service World.

Image credit: Depositphotos.com

Canadians overwhelmingly favour road trips over flying, citing greater control over their travel plans and safety concerns about air travel, a new study by Turo found.

The car-sharing marketplace highlighted Canadians’ travel preferences and concerns amidst a challenging economic landscape. Over half (57 per cent) of Canadians would rather spend five hours or more driving to their summer vacation destination than fly, according to the study. Additionally, 78 per cent of respondents believe that having access to a car during their vacation significantly reduces travel-related stress.

“Results from the study strongly indicate Canadians have an appetite for road trips this summer as it offers more personalization, from taking spontaneous pit stops along the way, packing extra items like camping gear or bicycles, or even bringing your dog along for the ride,” said Cedric Mathieu, senior vice president and head of Turo Canada.

The survey found that 65 per cent of Canadians prefer road trips due to the greater control they have over their itinerary (45 per cent), the ability to add multiple destinations to their trip (42 per cent), and better pricing (32 per cent). These factors make road trips an attractive option for many Canadians looking to maximize their travel experience.

Gen Z respondents, aged 18-27, exhibited the most significant hesitations around air travel. Over half (51 per cent) of Gen Z respondents cited safety concerns about air travel affecting their travel plans, the highest among all generations surveyed. Additionally, 25 per cent of Gen Zs prefer road trips to avoid flight delays, compared to 13 per cent of all Canadians surveyed.

Despite being the most concerned about travel costs, Gen Z is also the most willing to spend a substantial portion of their income on vacations. More than half (53 per cent) of Gen Z respondents are willing to spend more than their monthly paycheck on a summer trip, higher than the average across all Canadians (37 per cent).

However, 73 per cent of Gen Z respondents agree that saving enough for a trip is challenging due to current inflation rates, compared to 65 per cent of all Canadians. Moreover, 70 per cent of Gen Zs reported that their travel budget has decreased compared to last year due to the high cost of living.

The post Canadians prefer road trips over flights this summer appeared first on Auto Service World.

The transition to electric vehicles can be done but the timeframe mandated by governments around the world may not make it possible to be done right, an automotive leader recently warned.

It’s all about creating a sustainable transition, Leila Afas, director of global public policy at Toyota Motor North America, said during the recent MEMA Aftermarket Suppliers Global Summit in Florida.

“We need to make sure we have the sourcing, we need to make sure we have the consumer adoption and we need to make sure that our supply base is able to transition,” she said.

The timing feels almost equivalent to a transition being made overnight to much of the public. What happens to parts makers when the average age of a vehicle in the U.S. is nearly 13 years and nearly 15 years in sub-Saharan Africa?

“So we still need to make these parts,” Afas said. “That’s a humanitarian issue — being able to replace and update these cars that are already there.”

Most people can’t afford the price of a new vehicle, or even a used one. EVs are generally priced higher than comparable ICE vehicles.

“It shows that it’s not [usually] by choice somebody drives a 25-year-old Toyota Corolla,” Afas pointed out. “So that’s the thing — we need to make sure that it’s sustainable.”

An attendee asked what would be a more realistic goal for electrification and if delaying it a handful of years would make a difference. Afas didn’t give a specific timeline but noted a change is likely necessary.

“The direction is there,” she said. “Let’s bend that slope a little more towards reality.”

The post Bending the EV curve ‘towards reality’ appeared first on Auto Service World.

Image credit: Depositphotos.com

Canada’s run of 19 straight months of year-over-year increases in new vehicle sales came to an end in June. But industry observers at DesRosiers Automotive Consultants aren’t all that put off.

The 169,000 sales in June 2024 — dead even with the same time last year — probably could have come in higher if not for the devastating breach of CDK Global’s software, crippling dealerships from across North America from competing sales.

With dealers back online following the outage, interest rates cut and appearing to continue heading down and better OE incentives, there’s market momentum, DesRosiers’ analysis outlined. June’s seasonally adjusted annual rate came in at 1.72 million, a tick ahead of May, a “definitive positive,” said Andrew King, the consultancy’s managing partner.

“However, sales figures are still far below industry highs, with June sales exceeding 200,000 units in both 2018 and 2017,” he pointed out.

Year to date, the market is up 10.4 per cent compared to the first six months of 2023 with an estimated 924,000 vehicles sold. General Motors leads the market overall in volume with sales of close to 141,000 units during the first six months of the year. Volkswagen led the larger volume brands for percentage gain with sales up 54 per cent.

“Hopefully July will see a rebound from the software-related issues — with delayed sales being recovered quickly,” DesRosiers’ analysis said. “With interest rates starting a downward cycle and the inventory issues behind us, we will be watching closely to see how much momentum the market can hold on to as pent-up demand starts to wane.”

The post Why there’s optimism as new vehicle sales streak ends appeared first on Auto Service World.

Image credit: Depositphotos.com

Vehicles are far more durable today thanks to improved manufacturing techniques, advanced technology, electronic component replacement of mechanical parts and corrosion-resistant body parts.

As a result, Lang Marketing reported that vehicles have likely had at least five years added to their life expectancy over the last two decades.

It pointed out that vehicle scrappage remains moderate.

“The growing number of vehicles 12 years and older should have driven scrappage rates higher, but this has not materialized,” Lang reported.

Part of that is because people are choosing not to dump their older vehicles. With higher prices of new vehicles (up 40 per cent in the last seven years) and a 35 per cent increase in used vehicle prices over the same time, consumers are keeping their vehicles longer.

“Both developments have put downward pressure on the scrappage rates of older vehicles,” Lang said.

Vehicle life and scrappage have moved in opposite directions, it observed.

“The number of years that vehicles remain on the road has increased, and scrappage has been lower than expected, given the expanding population of older vehicles in operation,” Lang’s report, Vehicle Life & Scrappage Boost Aftermarket, said.

Longer vehicle life is also helping keep average vehicle age on the increase.

“Since older vehicles use more aftermarket parts per mile than newer models, these developments helped the rate of aftermarket product volume to grow faster than the total increase in miles driven during this period,” Lang said.

It also noted that virtually all vehicles five years and older are internal combustion engine ones.

“As vehicles remain in operation longer and the number of older vehicles increases, the size and growth of the ICE vehicle aftermarket will benefit significantly,” Lang said, adding that the ICE aftermarket will remain strong through the end of the decade.

However, having more older vehicles has a downside, impacting inventory demands and parts proliferation.

“The growth of older vehicles in operation will increase the need for aftermarket distribution channels to carry vehicle parts for more years than historically has been necessary,” Lang reported. “This will expand the problems of parts proliferation and inventory management demands at all levels of the car and light truck aftermarket.”

The post How much has been added to a vehicle’s life expectancy? appeared first on Auto Service World.

Image credit: Depositphotos.com

Electric vehicles are becoming more common on Canadian roads, partly thanks to reduced purchase prices. But their increasing prevalence is bringing new challenges, particularly in terms of collision repairs, according to Mitchell.

The technology and information provider for the property and casualty claims and collision repair industries found a notable increase in the total loss frequency for EVs in its Q1 2024 trends report, Plugged-In: EV Collision Insights.

In Canada, the total loss rate for EVs reached 7.48 per cent in the first quarter of 2024. That’s an 8 per cent increase from Q4 2023 and a 30 per cent increase from Q3 2023. This comes even as the total loss frequency for EVs remained comparable to that of 2021 and newer internal combustion engine (ICE) vehicles, which ended the quarter with a total loss rate of 7.44 per cent.

“Slowing new sales, manufacturer price reductions and changing consumer sentiment are impacting the value of used EVs,” explained Ryan Mandell, Mitchell’s director of claims performance, explained the trends. “As a result, the total loss frequency for collision-damaged EVs is increasing. However, it is also increasing for new gasoline-powered vehicles, which are comparable to EVs in terms of their complexity and cost to repair.”

The report also underscored the challenges faced by repair shops dealing with EVs. The average number of mechanical labour hours required for repairable EVs was nearly double that of ICE vehicles, with EVs requiring 3.04 hours compared to 1.66 hours for ICE vehicles. This substantial difference contributes to higher repair costs for EVs, Mitchell reported.

Moreover, although average claims severity decreased in Q1, the cost remains significantly higher for EVs compared to ICE vehicles. In Canada, the severity difference was $1,700 CAD, or 33 per cent, with EVs averaging CAD$6,810 versus CAD$5,110 for ICE vehicles. This trend is echoed in the United States, where the severity difference was $1,363, or 29 per cent, with EVs averaging $6,066 versus $4,703 for ICE vehicles.

Claims frequency for EVs is also on the rise — in Canada, it grew to 3.41 per cent in Q1 2024, a 38 per cent increase compared to Q1 2023. In the U.S., the claims frequency reached 2.26 per cent, representing a 40 per cent increase over the same period.

Parts utilization and repair practices further illustrate the challenges of EV collision repairs. Without a robust inventory of aftermarket and recycled parts, EV collision repairs are more likely to involve OEM parts — with 89.29 per cent of EV repairs said they use OEM parts compared to 65.14 per cent for ICE vehicles. Additionally, EV parts, which are often designed to be lighter to offset the heavier battery, are more challenging to repair. In Q1, 13 per cent of EV parts were repaired versus replaced; in ICE vehicles, it was 15 per cent.

The post As EV prices fall, claim costs rise appeared first on Auto Service World.

Image credit: Depositphotos.com

While interest rates have hopefully begun their long-term descent, the consumer price index (CPI) data for key sectors of the automotive industry continued to show increases in April.

But there was one notable exception, according to DesRosiers Automotive Consultants (DAC).

In the maintenance category, prices increased by 4.2 per cent, and automotive parts saw a 2.9 per cent uptick, indicating ongoing price gains in the aftermarket.

Leading the gains were insurance premiums, which surged by 6.8 per cent compared to April 2023. Gasoline prices also saw a significant rise of 6.1 per cent.

However, the trend changes when examining vehicle prices. The CPI for new passenger vehicle purchases increased by a modest 1.4 per cent compared to April 2023. In contrast, used passenger vehicles, which had experienced sharp price hikes during the semiconductor shortage, saw a CPI decline of 2.3 per cent 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,” said Andrew King, managing partner at DAC. “Hopefully price pressures will continue to ameliorate, and interest rates fall further, as the automotive market enters a somewhat unsteady period.”

The post Industry costs on the rise appeared first on Auto Service World.

Image credit: Depositphotos.com

Electric vehicle charging stations see the highest utilization rates in densely populated, higher-income areas near parks and shopping amenities, according to new data from the Transportation Energy Institute’s (TEI) Charging Analytics Program (CAP).

The analysis covered over 1,000 DC fast chargers across the U.S. and Canada.

The CAP, developed in partnership with the Center for Sustainable Energy (CSE), aims to provide businesses with actionable EV market and charging deployment data to optimize site selection and ensure a strong return on investment.

“We saw a need to help site hosts make informed decisions, optimize products and services, and collaborated with CSE to develop CAP to address those needs,” said Karl Doenges, executive director of the Charging Analytics Program. “Our tiered construct starts with a high-level summary of market dynamics and progressively adds more granular regional analysis.”

Key findings from CAP’s initial analyses included:

• Median Income: Higher median income is one of the top predictors of EV charging station utilization.
• Infrastructure: The number of roads and population density significantly influence charger use.
• Amenities: Proximity to parks, open spaces, and stores correlates positively with charger utilization.
• Local factors: Utilization varies widely among chargers within a mile of each other, indicating the importance of hyperlocal characteristics such as traffic flow and traffic lights.

“EV chargers can attract customers who will spend time and money at a retailer. But businesses need data to determine which sites will bring the best returns,” said Scott Shepard, CSE’s transparency and insights director. “CAP layers EV market and charger deployment data with insights from EV infrastructure and retail business experts to provide actionable intelligence for charger deployment.”

The post Where EV chargers are used most appeared first on Auto Service World.

The post Canada sees ZEV surge in Q1 appeared first on Auto Service World.

Image credit: Depositphotos.com

Car dealerships across North America are grappling with significant disruptions following cyberattacks on a major software provider, CDK Global, which serves thousands of auto dealers in the U.S. and Canada.

On June 19, CDK Global experienced two consecutive cyberattacks targeting dealer management systames, resulting in a prolonged outage that continues to affect dealership operations. This has led to delays for prospective car buyers. Orders are being processed manually, with pen and paper. Some media reports indicate that repair orders can’t be completed because it has to run through the computer system to be closed.

The company is calling the cyberattack “a ransom event” with Bloomberg reporting the attack being linked to a group called BlackSuit. Bloomberg also reported that the ransom was set at tens of millions of dollars and that CDK was planning to pay.

“When you see an attack of this kind, it almost always ends up being a ransomware attack,” Cliff Steinhauer, director of information security and engagement at the National Cybersecurity Alliance, told the Associated Press. “We see it time and time again unfortunately, [particularly in] the last couple of years. No industry and no organization or software company is immune.”

CDK anticipates the restoration process to not happen earlier than the end of June, according to a memo sent to dealers and seen by Reuters. The company has asked dealers to make alternate plans for their month-end financial closing processes.

Illinois-based CDK is in about 15,000 dealerships across Canada and the U.S., according to the company. It’s a crucial player in the auto sales industry, providing software for daily operations such as vehicle sales, financing, insurance, and repairs. According to Reuters, the cyber attack has impacted about half of Volkswagen dealers and around 60 per cent of Audi’s dealers in the U.S.

In response to the cyberattacks, the Associated Press reported that CDK shut down all its systems as a precautionary measure and has since begun the restoration process. The company has launched an investigation with third-party experts and notified law enforcement. CDK has also warned customers of potential phishing attempts by bad actors posing as CDK affiliates.

Major auto companies like Stellantis, Ford, and BMW confirmed to The Associated Press that the CDK outage has impacted some of their dealers, but sales operations continue. Stellantis noted that many dealerships have reverted to manual processes, including writing up orders by hand.

A Florida man is now suing CDK in a potential class action lawsuit, saying the company neglected to safeguard his private information and claims that his private information — including his Social Security number, financial details, credit card numbers and bank account information — was impacted in the breach. He further claims the software company should have been better prepared for the cyberattack, given the prevalence of such risks.

The post Dealers hammered by outage appeared first on Auto Service World.

Image credit: Depositphotos.com

New vehicle prices remained lower year-over-year for the eighth consecutive month in the U.S. as of May, as higher inventory levels continued to exert downward pressure on transaction prices.

According to Kelley Blue Book, the average transaction price (ATP) for a new vehicle in the U.S. was $48,389, a 0.9 per cent decrease, approximately $442, from May 2023.

Increased incentives played a significant role in making new vehicles more affordable, according to the group. The average incentive package, which includes discounts and rebates, rose to 6.7 per cent of the ATP, the highest level since May 2021. Incentives in May averaged around $3,200, an increase from one year ago when they were 4 per cent of ATP.

“In May, we saw some positive news on the sales front,” said Erin Keating, executive analyst for Cox Automotive. “Higher incentives and lower prices have been beneficial for consumers, especially those concerned about inflation. While many vehicles are still selling at high prices, there are excellent, affordable options, particularly in the compact segments.”

Higher inventory levels are a key factor in the current pricing trends. At the beginning of May, new vehicle inventory was to be at a 51 per cent increase year-over-year and the highest level since late 2020, according to vAuto Live Market View. Many brands had more than 100 days’ supply, with only Toyota, Lexus, and Honda having less than 60 days’ supply.

This abundance of inventory is keeping prices in check and driving higher incentives as dealers compete for customer, according to KBB.

In May, four of the top 10 best-selling vehicles were full-size pickup trucks, each with ATPs above $60,000. Despite these high-priced trucks, five of the top 10 most popular vehicles had transaction prices below $40,000, significantly below the industry average of $48,389. For instance, the Toyota RAV4, the third most popular vehicle, averaged $37,608, and the Honda CR-V, ranked fourth, averaged $37,364, nearly 23 per cent below the national average.

The share of vehicles selling for less than $40,000 increased in May compared to the previous year, suggesting a shift towards more affordable models. Vehicles priced below $40,000 accounted for 41.2 per cent of new-vehicle sales, up from 36.8 per cent in May 2023.

In the electric vehicle (EV) market, prices have seen volatility. Tesla’s average transaction price rose by 3.1 per cent month-over-month to $57,369 in May and was up 1.5 per cent year-over-year. Since January, Tesla’s ATP has increased by more than 10 per cent, partly due to growing Cybertruck sales, which averaged $108,667. Overall, EV prices increased in May, with the average EV selling for $56,648, up 2.6 per cent from April but down 4.1 per cent year-over-year.

The post New prices decline in U.S. appeared first on Auto Service World.

It seems pent-up demand for new vehicles is dissipating and new vehicle sales numbers are reaching a level of concern.

Canadian new light vehicle sales in May 2024 reached 169,000 units, according to DesRosiers Automotive Consultants. On one hand, that’s a notable improvement over the previous two years — almost 6 per cent better than 2023 and 20 per cent higher than “the pitiful” numbers of 2022 when supply shortages hurt inventories. On the other, that’s still well behind the 200,000 mark last seen in May 2019.

The seasonally adjusted annual rate (SAAR) for May 2024 was 1.63 million units, marking the lowest SAAR recorded so far this year. Despite this, the automotive market continues to show some level of growth, now marking 19 straight months of year-over-year gains.

“It is somewhat concerning (if not unexpected) that the SAAR appears to be trailing off from the levels hit in January and February when pent-up demand fuelled the market to lofty heights,” said Andrew King, managing partner at Desrosier. “However, we have now seen 19 consecutive months of year-over-year gains, and the market continues to move forward, albeit supported by an increasing range of sub-vented interest rates and other incentives.”

What may work in the industry’s favour is a reduction in interest rates. In a widely expected move, the Bank of Canada cut the number to 4.75 per cent, the first cut since March 2020. With inflation easing, more cuts can be expected. Speculation is there could be two or three more cuts by the end of the year.

However, Bank governor Tiff Macklem warned against moving the interest rate down too quickly and jeopardizing progress.

In the U.S., though, it’s a different story where the economy is said to be still too hot to move rates down. Job numbers in June came in with nearly 90,000 new jobs added than expected in May

“Inflation appears to be stuck in a range and there will need to be several consecutive months of undeniable proof that it is finally moving down at a clip, rather than a crawl, before any action is taken,” said Nigel Green, the chief executive of financial advisory firm deVere Group. “This is simply not happening at the moment and there’s no reason to suggest it will next month or the month after that.”

The post ‘Concerning’ month for new vehicle sales appeared first on Auto Service World.

A new wave of electric vehicle buyers is expected to enter the market in the second half of the decade, according to the latest 2024 Path to EV Adoption Study by Cox Automotive.

The study reported that while nearly half of current vehicle shoppers are not considering an EV, a significant shift is anticipated as technological advancements and improved infrastructure address their concerns.

Currently, 45 per cent of in-market vehicle shoppers are considering an EV, down from 51 per cent last year. However, the study suggested that within three to five years, 54 per cent of today’s skeptics — those currently only considering traditional internal combustion engines — will start considering EVs. By 2033, 90 per cent of all vehicle shoppers are expected to have EVs on their lists.

“While we’ve seen EV sales growth slow and consideration dip, we believe this is part of a normal growth curve and not the end of the story,” said Isabelle Helms, vice president of research and market intelligence at Cox Automotive. “With more infrastructure, education, and technological innovation, we believe electric vehicle sales will continue to grow in the long term.”

The study indicated that high EV prices and a lack of charging stations are the main barriers for skeptics, who emphasized the absence of sufficient charging infrastructure as their primary concern. Many are waiting for better range, longer battery life and overall technological advancements before making the switch. In contrast, those already considering EVs cite price as the top obstacle.

The demographic landscape of EV buyers is also shifting. The market, once dominated by luxury and high-income households, is now attracting a more diverse group of buyers, including Gen Z, multicultural, and less affluent shoppers. This broader appeal is partly due to the increasing consideration of used EVs. The study found that 77 per cent of EV considerers are now looking at used models, a significant rise from 62 per cent in 2021.

Moreover, mainstream brands like Toyota, Hyundai and Kia are gaining traction in the EV market, though Tesla remains the most-considered EV maker. The study highlighted that many consumers are still unaware of EV offerings from other major automakers, such as Nissan, despite the Leaf being available in North America since 2011.

The relationship between dealers and automakers regarding EV sales has improved since 2019, becoming more strategic and balanced. Dealerships report increased support in marketing, sales and service, but they also seek additional resources such as more EV incentives and advertising funds.

Despite feeling pressure from automakers to meet EV sales targets, 86 per cent of franchised dealers are likely to continue investing in EV infrastructure, signalling a collaborative effort to accelerate EV adoption.

The post When EV adoption is expected to surge appeared first on Auto Service World.

Cars.com has released its second annual Affordability Report, highlighting a more accessible retail environment for car buyers.

The 2024 report provides a comprehensive, data-driven analysis of the current market, including consumer buying attitudes, financing trends and detailed vehicle comparisons.

According to the report, new-vehicle supply is on the rise, with vehicles under $30,000 seeing the fastest growth in inventory, up 77% year-over-year, though still below 2019 levels.

“While prices are down, they’re still nowhere near pre-pandemic levels,” said Stef Schrader, news editor at Cars.com. “The good news is there is inventory available and an increasing number of affordable options — and consumers with a high-quality trade-in to offer are in an even better position to buy within their budget.”

The report evaluated 85 new vehicles, with half of the best-in-class models priced under $30,000. These vehicles offer popular options, focusing on safety technology and low running costs, considering median list prices and annual fuel expenses.

For consumers with a low-mileage, later-model vehicle, now is an optimal time for trade-ins, the group noted. A shortage of late-model used inventory means that the 49% of shoppers planning to trade in their current vehicle can get a premium.

The report also notes improvements in the electric vehicle (EV) market. Concerns about charging and range remain, but the 2024 EV class shows higher average ranges and lower average prices compared to 2023. Dealers and manufacturers, responding to a demand slump and changing tax credits, are offering new incentives and deals, making it a favorable time for EV-curious shoppers to consider making a purchase.

The post Market prices, consumer budgets align closer: Report appeared first on Auto Service World.

The average age of vehicles in Canada is more than two years lower than American vehicles and the gap has a fairly simple answer: It’s all thanks to a pipeline of vehicles exiting Canada and heading to the U.S.

Canada’s average vehicle age is 10.5 years. In the U.S., it’s more than two years higher at 12.6 years. During this year’s AIA Canada National Conference in Toronto, Todd Campau, aftermarket practice lead at S&P Global Mobility, explained why there’s such a gap.

He noted that the number of vehicles in operation in Canada is steady at 26.7 million. Campau pointed out that even though new vehicle sales are not what they used to be, there is still growth. The data left him curious. So he investigated why vehicle age wasn’t the same or closer for both sides of the border.

During the session, The Impact of the Evolving Vehicle Fleet on Vehicles in Operation and Vehicle Kilometres Travelled, he explained what he found. He told the audience that there’s some correlation between the Canadian dollar and vehicle exports to the U.S. When the dollar is low, it’s cheaper for Americans to import vehicles — and that’s exactly been the case for several years.

“And one of the things that is definitely impacting your fleet are exports going into the U.S.,” he explained.

He checked out federal databases, which showed what was taking place.

S&P Global Mobility’s Todd Campau speaks at the AIA Canada 2024 National Conference

In particular, the third quarter of 2020 and second quarter of 2022 each saw about 180,000 vehicles shipped from Canada south of the border. That wasn’t tied to the exchange rate, however — it was because there was a dearth of vehicles in the U.S. marketplace and eyes turned to Canada to fill the gap.

Since that later date, quarterly exports to the U.S. have been around at least 50,000 vehicles.

“There’s been a stronger dollar, there’s the high demand for vehicles in the U.S. And so importers in the U.S. have been very successful grabbing vehicles here and selling them there for profit,” Campau observed.

Furthermore, the vehicles crossing the border have been on the younger side of the spectrum, meaning U.S. importers are specifically targeting low-age cars and light trucks.

Back in 2016, the average age of a vehicle going to the U.S. was approaching nine years old. Today, they’re no more than seven on average. That has Campau concerned about the Canadian aftermarket.

“For me, that’s one of the big yellow flags for the market here,” he said.

If older vehicles nearing end-of-life are the ones being exported, that’s one thing. But vehicles just entering the aftermarket sweet spot being shipped down south creates a problem in the Canadian market.

“That’s taking real aftermarket opportunity away because that’s right in that sweet spot of aftermarket repair,” Campau explained. “So this is something that I think is very important for the marketplace to be sensitive of.”

The post Why’s Canadian average vehicle age so low? appeared first on Auto Service World.

Image credit: Depositphotos.com

Consumers are finding dealers more convenient, lower priced, fairer and with greater technical expertise than before, a recent report found.

A recent Lang Marketing iReport revealed significant changes in consumer perceptions of service stations and garages versus dealers from 2018 to 2023, with notable shifts across key factors such as convenience, technical repair capacity and price.

Convenience of repair

Service stations and garages have historically received high consumer ratings for convenience, attributed to their widespread locations. The COVID-19 pandemic severely impacted the number of outlets available to consumers, leading to a significant decline in their numbers. This reduction has decreased the perceived convenience of using service stations and garages for many consumers.

Technical repair capacity

Dealers are perceived to have superior technical repair capacity compared to service stations and garages. This perception is particularly strong among owners of foreign nameplate vehicles and newer models. Consumers believe dealers possess greater technical expertise, especially for complex repairs, which has widened the perceived gap in technical repair capacity between sealers and service stations and garages.

Low price

Consumers continue to see service stations and garages as offering lower prices for repairs compared to dealers. This perception is the most pronounced among the four factors measured. However, dealers have been making efforts to become more price competitive, particularly for routine repair jobs like oil changes and brake work. By offering aftermarket brands for older vehicles, dealers have narrowed the price gap, making them more appealing to cost-conscious consumers.

Fairness of price

Service stations and garages are still viewed as offering fairer prices than Dealers. This perception is less pronounced among consumers with foreign nameplates and newer vehicles. Nevertheless, Dealers are working to improve their image by emphasizing convenience and technical expertise, which helps position their pricing as fairer in the eyes of consumers.

Changing perceptions and market impact

Over the past five years, consumer perceptions of service stations and garages and dealers have evolved, influenced by both external factors like COVID-19 and strategic actions by dealers. Dealers have enhanced their services by introducing quick lube services, quick-service lanes and extended business hours, aiming to improve convenience and capture a larger share of the do-it-for-me (DIFM) market.

These efforts appear to be paying off. Consumers now perceive dealer repairs as more convenient, lower-priced, and fairer than they did five years ago. Meanwhile, the perceived technical gap between dealers and service stations and garages has grown, reinforcing dealers’ advantages in complex repairs.

As a result, Lang reported, dealers have significantly increased their share of the DIFM market between 2018 and 2023, while service stations and garages have seen a decline. With many dealers focusing on expanding their service bay business, this trend is expected to continue, leading to a greater share of total DIFM volume being captured by dealers and a reduction in the share held by independent outlets.

The post How consumer aftermarket perceptions have changed appeared first on Auto Service World.

Image credit: Depositphotos.com

Canadian drivers are increasingly prioritizing efficiency and range amid high fuel prices and a growing electric vehicle market, according to a recent survey from the Tire and Rubber Association of Canada (TRAC).

The survey reveals that 77 per cent of motorists understand that properly inflated tires improve fuel economy, reduce vehicle emissions and protect the environment. Additionally, 62 per cent recognize the role of proper tire inflation in optimizing EV range.

The survey also indicates a rising interest in EVs, with 36 per cent of drivers considering an EV for their next purchase. This figure rises to 48 per cent among drivers aged 18 to 34.

High fuel prices and the cost-of-living crisis are affecting summer driving plans, with 58 per cent of drivers likely to cancel or limit road trips due to financial pressures. This concern is more pronounced among younger drivers, with 66 per cent of those aged 18 to 34 and 62 per cent of those aged 35 to 54 feeling the pinch.

“Canadian motorists are well aware of the crucial role tire maintenance plays in optimizing efficiency and EV range,” said Carol Hochu, president of TRAC. “However, our findings reveal a pressing need for more education about how to do tire care right. This is especially true among younger drivers, who show a heightened interest in EVs but lack essential tire maintenance knowledge.”

Here are other key findings from the TRAC study:

• 81 per cent believe that high living costs make proper tire inflation more important than ever
• 95 per cent understand that proper tire inflation is essential to vehicle safety

Despite high awareness, there are significant gaps in knowledge about proper tire inflation, particularly among younger drivers:

• Only 24 per cent of drivers check tire inflation pressures monthly as recommended, dropping to 18 per cent among drivers aged 18 to 34.
• 62 per cent are unaware that inflation pressures should be measured when tires are cold, increasing to 69 per cent among younger drivers.
• 32 per cent mistakenly refer to the air pressure stamped on the tire’s sidewall, which is the maximum pressure, not the recommended level.
• 12 per cent rely on visual inspections or do not know how to determine proper tire inflation, rising to 19 per cent among younger drivers.

Industry studies, TRAC noted, show that properly inflated tires can improve gas mileage by 0.6 per cent on average, with potential increases up to 3 per cent. Underinflated tires can lower gas mileage by 0.2 per cent for each 1 PSI drop in pressure.

The post Drivers are putting focus on efficiency appeared first on Auto Service World.

The latest Consumer Behaviour Series report from AIA Canada shows that dealers are outranking independent automotive service providers in several key areas.

The Dealership versus independent: How Canadian vehicle owners choose a service provider report is available to AIA Canada for free, or $199 for non-members. It explores the factors influencing Canadian vehicle owners’ choices for maintenance and repair services have been revealed, highlighting significant trends and preferences in the industry.

It found that most Canadians (37 per cent) believe dealers outperform the aftermarket. One-third believe the reverse, that independent automotive service professionals outperform dealers. The remaining 30 per cent believe both are the same.

When comparing a few specific areas, dealers ranked higher compared to automotive service providers in:

• • Helpful service advisor: Dealerships 37% vs. ASPs 23%
  • Proactive notifications: Dealerships 46% vs. ASPs 18%
  • Technical competence: Dealerships 36% vs. ASPs 20%
  • Quality of work: Dealerships 33% vs. ASPs 24%

The independents came out ahead in:

• • Value for money: ASPs 20% vs. Dealerships 58%
  • Being trustworthy: ASPs 28% vs. Dealerships 36%

If ASPs want to build greater trust with consumers, they should look to for consistency in matching up technicians with customer vehicles. Two-thirds of respondetns said they would trust their service center more if the same technician always worked on their vehicle.

The same number of respondents said they would trust more if more time were spent explaining the impact of maintenance and repair, while 64 per cent would trust more if they received more help in planning for short, medium and long-term maintenance and repair.

About half (51 per cent) would be more trustful if shops sent videos and websites explaining the scope and importance of maintenance and repair.

The report further dives into where Canadians go for maintenance and repair, the reasons they choose a shop, how they find a new service provider, their perceptions of the independent aftermarket versus dealers and how to increase trust and loyalty.

In its key takeaways and conclusions, the report noted that ASPs must focus on building trust and providing quality customer service to retain customers and justify premium pricing. Transparency, trust, and quality service ensure repeat business, even if price initially attracts customers.

Satisfied customers can become strong advocates for ASPs, generating positive word-of-mouth and online reviews, the report added. Every customer interaction is an opportunity to make a lasting positive impression, encouraging loyalty and recommendations.

Image credit: Depositphotos.com

The post How consumers see dealers compared to independents appeared first on Auto Service World.

Volvo’s Matt Girgis stands in front of the newly unveiled EX90 at the 2024 Canadian International AutoShow

Despite challenges, 64 per cent of Canadians looking to purchase a new vehicle within the next five years are considering a hybrid, plug-in hybrid, or fully electric vehicle, according new report.

The 2024 Mobility Trend Report by Volvo Car Canada highlighted mixed sentiments toward electric vehicles (EVs) amid economic headwinds. Three-quarters (76 per cent) of those not considering an EV cited high costs as the main barrier. Concerns over infrastructure are also prominent, with 78 per cent agreeing that there isn’t enough publicly available charging infrastructure, and 65 per cent worried about getting stranded due to running out of charge.

Additional findings from the report include:

• Only 15 per cent of Canadians believe EVs are more cost-effective than gas vehicles when considering purchase price, fuel/charging costs, maintenance, and insurance.
• 64 per cent feel the environmental benefits of EVs are over-hyped.
• 46 per cent of respondents said a longer maximum range would make EVs more appealing, while 42 per cent called for more easily accessible charging stations and 38 per cent desired better government incentives.

Volvo Car Canada noted in its announcement about the finding that it is working to improve charging infrastructure. In 2023, the company secured additional charging access through the North American Charging Standard (NACS), enabling use of Tesla’s Supercharger network, which adds 12,000 fast-charge points.

Additionally, Volvo recently launched the EX30, its smallest and most affordable SUV, designed to have the smallest CO2 footprint of any Volvo car to date.

“Understanding that early adopters have already transitioned to electric vehicles, we’re focusing on the broader base of potential EV owners who are deterred by cost and infrastructure concerns,” said Matt Girgis, Managing Director at Volvo Car Canada.

The report also found that the most likely to consider an EV are from British Columbia (74 per cent) and between the ages of 18 and 34 (76 per cent).

The post Canadians’ EV interest grows despite challenges appeared first on Auto Service World.

With average age rapidly growing, the types of vehicles that the aftermarket is servicing are expanding just as quickly.

What was once considered anything in the six-12-year-old range has now expanded to well beyond that, explained Todd Campau, aftermarket practice leader at S&P Global Mobility.

A major driving force is passenger cars, he said at AAPEX 2023 during his presentation, Trends Impacting the North American Aftermarket.

“The passenger car average age is growing nearly out of control at this point because we’re basically, when you think about it, we’re putting 20 per cent of all new sales into passenger cars. They maintain about 40 per cent market share,” he said.

The average age of a passenger car in the U.S. was 13.8 years. Until passenger car market share drops to around 20 per cent, average age is going to continue to run up.

Light trucks, by comparison, are at 11.8 years now after they sat at about 11.5 consistently for some time.

“We’re beginning to see critical mass reached in that crossover utility space. And it’s been holding that high market share for a few years,” Campau observed. “So we’re going to start to see it climb a little bit on the light truck side, too.”

But that’s only part of the story for Campau. More interesting is how these vehicles are moving through their lifecycles.Over the next 10 years, the U.S. is expected to add 19 million vehicles to its fleet that are over the age of eight years.

“This tells me that the sweet spot is going to continue to grow and elongate,” Campau said. “If we have almost 100 million vehicles in 2033 that are over 16 years of age, No.1, average age is going to continue to climb because of this. And, No. 2, we’re going to be seeing a lot more repairs for a lot older vehicles for a longer period of time.”

This is the cumulative effect of vehicle sales during the Great Recession that started in about 2008 and the supply chain impacts of the COVID-19 pandemic and the economic uncertainty since.

In other words, years in which the vehicles in operation numbers would have been replenished and were not — vehicles that would have been typically replace were not. So older vehicle remained on the road and were delayed until later, if at all. About half of all vehicles in the vehicle fleet are going to be older.

“So really good news for us because almost all those repairs … to our channel,” Campau pointed out.

But that means non-traditional players will be coming after traditional business as they see growth opportunities.

“You are seeing more probably OEs trying to get into repairing older vehicles for sure. And this is why. They’ve discovered that this work can be positive to the bottom line. And it’s better than the warranty work they get stuck doing for all the recalls and things like that,” Campau said. “And so they’re going to continue to push into trying to repair more of these old vehicles. But in general, right now, that’s our sweet spot. That’s where we do the best work. And it’s going to grow rapidly.”

The post How average age is expanding aftermarket sweet spot appeared first on Auto Service World.

April’s automotive sales in Canada displayed a mild rebound.

DesRosiers Automotive Consultants reported sales up 14 per cent to approximately 164,000 units. However, this improvement pales in comparison to the robust sales figures exceeding 180,000 units typically seen in pre-pandemic Aprils.

Last month’s seasonally adjusted annual rate (SAAR) of sales stood at a “somewhat tepid” 1.68 million, showing a slight uptick from the previous year but still lagging behind the over two-million high set in the earlier months of this year. April’s performance aligns with March’s results but indicates a downturn from the high pace experienced at the year’s start.

“April was far from memorable, registering as the weakest month this year from a sales perspective,” noted Andrew King, managing partner at DesRosiers. “Corporate performance varied significantly across the board. While some companies posted strong gains, others found the going tough. The market has enjoyed 18 consecutive months of year-over-year gains, yet there’s a clear slowdown in momentum, and sales are receding from the rapid pace seen earlier.”

The post Auto sales show modest recovery in April appeared first on Auto Service World.

New research from Compare the Market found that used cars from American and Japanese manufacturers are the most sought-after worldwide, outshining newer market entrants from China.

The study, which analyzed nearly 500 used vehicle models’ online search volumes over the past 12 months, placed the Jeep Wrangler, Toyota Tacoma, and Honda Civic at the top of the global demand list.

The Jeep Wrangler led the ranking as the most in-demand used vehicle, closely followed by Toyota’s Tacoma and Honda’s Civic, highlighting a strong preference for reliable brands known for durability and performance.

Notably, the Tesla Model 3 emerged as the top used electric vehicle (EV), garnering 412,000 searches globally, surpassing the popular Toyota Camry.

Chris Ford, a spokesperson for Compare the Market, noted that the data reflects ongoing consumer trends favoring larger SUVs and trucks.

“Used vehicle buyers are overwhelmingly interested in larger SUVs and trucks globally, with only five full electric cars appearing in the top 50 list,” he said.

“However, despite the rapid rise of Chinese and established European and South Korean car brands, American and Japanese automakers — including Toyota, Honda and Ford — remain the most in-demand in the used market.”

Here’s a look at the top 10 most searched used cars globally:

1. Jeep Wrangler – 536,200 searches
2. Toyota Tacoma – 531,000 searches
3. Honda Civic – 505,600 searches
4. Honda City – 498,200 searches
5. Tesla Model 3 – 412,000 searches
6. Toyota Camry – 391,200 searches
7. Toyota RAV4 – 331,200 searches
8. Honda Accord – 321,400 searches
9. Ford Bronco – 291,700 searches
10. Honda CR-V – 281,100 searches

If you’re in the market to buy used cars in Houston, EchoPark’s Texas location offers various American and Japanese models. EchoPark ensures exceptional quality with no compromises.

The post The top used vehicles consumers search for appeared first on Auto Service World.

While new vehicle sales have seen growth in the first quarter of 2024, there is a more nuanced story happening at the segment level. And it’s cause for concern for a leading industry observer.

DesRosiers Automotive Consultants has found significant disparities between the luxury and mass market segments.

Mass market vehicles saw a robust increase of 18.7 per cent, but the luxury sector experienced a decline of 7.3 per cent. Notably, luxury cars dropped by 29.1 per cent and compact luxury cars decreased by 19.7 per cent, making them two of the three worst-performing segments for the quarter.

Conversely, subcompact SUVs surged ahead, outpacing the overall market with a 58.2 per cent increase in sales, driven by strong performances from models like the Chevy Trax, Nissan Qashqai, and Hyundai Kona. Sports cars also enjoyed substantial growth, with a 48.3 per cent increase led by the VW Golf R, the group reported.

In terms of vehicle types, light trucks continued to outperform passenger cars, capturing 86.8 per cent of the market with 348,000 units sold, an increase of 16.2 per cent. Passenger cars also saw growth, though more modest, with a 10 per cent increase to 53,000 units sold.

Despite these positive figures, DAC expressed concerns about the stability of the vehicle market.

“There are a number of warning signs appearing even in the mainstream market — incentives are climbing, sub-vented leasing has reappeared and consumers are increasingly pushing back against the ‘trimflation’ seen in 2022-23,” said Andrew King, managing partner at DesRosiers.

The firm noted that it is closely monitoring the market for signs of a potential tipping point where high interest rates, escalating vehicle prices and a sluggish economy might outweigh pent-up demand.

The post Luxury, mass market vehicle sales diverge appeared first on Auto Service World.

A recent study has found that electric vehicle owners have voiced a resounding commitment to electric mobility.

The EV Ownership Lifestyle study conducted by CDK, provided insight into the current state of EV adoption and the factors driving consumer preferences towards electric vehicles.

The report underscored the importance of addressing consumer hesitations and the pivotal role of the industry in promoting electric mobility.

An overwhelming 73 per cent of EV owners stating their future vehicle purchases will exclusively be EVs. This loyalty spans across brands, including Tesla and non-Tesla owners alike, showcasing the broad appeal of electric vehicles beyond the confines of any single manufacturer.

“There are questions about the types of EVs being built and if those are meeting consumer wants and daily driving demands. Price is also still a major roadblock, as affordability across the industry is top of mind,” the study noted.

The report looked into the purchasing journey of EV buyers, finding that a about three-quarters (74 per cent) had also considered traditional internal combustion engine (ICE) vehicles or hybrids before ultimately deciding on an EV. This, the report noted, highlights the pivotal role of salespersons in the automotive industry, with 54 per cent of EV purchasers influenced by dealership sales staff in their decision to opt for an EV.

“There’s another popular myth about persuadable car shoppers that this study disproves: The idea that car salespeople try to dissuade them from buying an EV. While there may be true-life anecdotes of this happening, the numbers in our study didn’t prove that,” the report said.

A notable aspect of EV ownership highlighted in the study is the cost of maintenance. A majority of EV owners (56 per cent) reported lower maintenance costs compared to their previous gasoline vehicles. This aligns with the widely held belief that EVs, due to their simpler mechanics and fewer moving parts, offer a more cost-effective solution to long-term vehicle maintenance.

That said, automotive aftermarket experts have warned of high-cost repairs that may be common in EVs as higher-priced components are under more stress.

“The repairs are likely going to be a lot more expensive,” said Todd Campau, aftermarket practice leader at S&P Global Mobility at the 2023 MEMA Aftermarket Suppliers Vision Conference. “The number of repairs may not be as high as we have with internal combustion. But I think there’s going to be opportunity and there’s going to be revenue. I think calibrating and maintaining sensors is a huge opportunity for somebody to dive into.”

Bret Jordan, managing director at consultancy firm Jefferies, agreed, noting conversations about enhanced corrosion issues seen in vehicles in Norway.

“They said that eight-year-old Teslas look like money because there’s a lot going on underneath that car or within that car,” he said at the same conference.

The post EV owners plan to stick with electric: Study appeared first on Auto Service World.

Image credit: Depositphotos.com

A recent survey has found that the majority of EV drivers rely heavily on DC fast chargers for their extended travel needs.

The study was conducted by FLO, a provider of EV charging solutions, and got feedback from nearly 40,000 EV drivers across the United States and Canada to look at charging patterns and preferences of the EV community.

Key findings from the survey revealed that 42 per cent of respondents utilize DC fast chargers at least once a month, while 60 per cent reported depending on them for longer or multi-city journeys. This, FLO reported, indicates a critical need for DC fast charging stations to support the growing number of EVs on the road.

Additionally, the survey explored how EV drivers spend their time while charging. More than half of the respondents (51 per cent) engage with amenities available at the charging sites. Three in five (60 per cent) of drivers prefer to use their charging downtime to eat or buy refreshments, and 19 per cent take the opportunity to shop at nearby retail stores.

The importance of accessible, public charging infrastructure is important to EV development as three in 10 (29 per cent) of surveyed EV owners reported not having home charging stations.

Furthermore, the data suggest a diverse usage pattern among EV drivers, with 35 per cent primarily using Level 2 charging stations, 27 per cent opting for DC fast charging and 31 per cent utilizing a mix of both.

“This variety underscores the need for a comprehensive network that offers both quick top-ups and longer-stay charging solutions and is designed for drivers who live in a range of building types,” FLO’s announcement said.

The study also pointed out that most EV drivers typically stay within their local area, adhering to the range provided by a single overnight charge. In Canada, 30 per cent of respondents drive 151 to 250 kilometers per week, while in the U.S., 37 per cent travel between 100 to 200 miles weekly.

The post Most EV drivers depend on fast charging appeared first on Auto Service World.

In the face of inflationary pressures, Gen Z and younger Millennials are taking proactive steps to maintain financial stability, according to the 2024 Consumer Debt Report from the Credit Counselling Society (CCS).

The agency noted that these age groups are showing resilience by adapting their financial strategies amidst challenging economic conditions.

The survey, which involved participants from the Angus Reid Forum, revealed that 50 per cent of Canadians aged 18-54 have sold personal items or consider it a significant possibility due to financial pressures. Furthermore, 19 per cent of 18 to 34-year-olds have moved back with parents or relatives because of rising interest rates and inflation, with another 21 per cent seeing it as a likely option. Additionally, 20 per cent in this age bracket have taken on second jobs or side gigs, with 42 per cent contemplating the same move.

Alarmingly, 54 per cent of individuals between 18 and 34 years old have incurred more debt to stay financially afloat. Among Canadians who reported an improvement in their financial situation, 49 per cent attributed it to spending less on non-essential items. On the flip side, 85 per cent of those feeling financially worse off cited increased expenditure on essentials, with 47 per cent noting a rise in debt and 38 per cent mentioning emergency expenses as factors.

Peta Wales, president and CEO of CCS, highlighted the continuous decrease in Canadians’ confidence in their financial situation for the third consecutive year, emphasizing the hardships of taking on more debt or using savings to manage current expenses. Over the past year, Canadians have supplemented their income by accessing savings (56 per cent) and borrowing from credit cards (44 per cent).

The report also sheds light on the psychological impact of financial stress, with 36 per cent of Canadians feeling anxious about their financial situation, marking a consistent increase since 2020. The stigma around debt remains, with 70 per cent of low-income Canadians and 50 per cent of 18 to 34-year-olds with non-mortgage debt feeling embarrassed and hopeless.

The post How inflation is affecting younger consumers appeared first on Auto Service World.

Financial barriers continue to play a crucial role in Canadians’ hesitation towards electric vehicle adoption, according to a recent study.

The latest findings from the Car Ownership Index by Turo found that one in three (29 per cent) of Canadian respondents not planning to buy an EV cite the high costs associated with these vehicles as the primary obstacle.

The index, which provides insights into Canadians’ attitudes and challenges related to car ownership, highlighted the monetary factors as significant hurdles preventing a more widespread shift to electric vehicles in the country. Despite growing environmental awareness and the increasing push towards sustainable transportation, the initial high costs of EVs remain a deterrent for a considerable segment of the population.

Vehicle ownership costs overall are further pushing Canadians towards car sharing options as many young Millennials say they can’t afford a vehicle, period.

According to the survey, 21 per cent of young millennial respondents reported using a car-sharing service within the last 18 months, a rate more than double the average across all age groups, which stands at 9 per cent.

The primary uses for car sharing among respondents included domestic leisure travel (37 per cent), running errands (29 per cent), and international leisure travel (16 per cent).

The post Price tag continues to hold back potential EV buyers appeared first on Auto Service World.

Image credit: Depositphotos.com

In what could be a sign that new vehicle sales might see their hot streak come to an end, March sales were underwhelming, according to DesRosiers Automotive Consultants.

While a 9.2 per cent year-over-year growth mark can be taken as a positive sign, it’s dwarfed by the 24.4 per cent growth seen the month before. This could be a sign that things are slowing down in the area.

“The March gain seems just a touch anticlimactic,” the consultancy wrote in its analysis.

The 159,000 units sold in March are still well below the typical 180,000-plus seen pre-pandemic in that month, which is usually when sales kick into high gear for the year.

The seasonally adjusted annual rate of 1.74 million units was “also disappointing,” the group said, noting it was the lowest seen over the past six months.

“For the time being, pent-up demand continued to carry the new light vehicle market as vehicle availability approached normalization — although there are increasing warning signs starting to appear in the market that are raising our level of concern,” said managing partner Andrew King.

In January, DesRosiers did note of signs pointing to weakness. It highlighted cracks are becoming more evident as there is “a split developing between the luxury market — which is showing distinct signs of weakness — and the mainstream market which is still surfing a wave of pent-up demand.”

First quarter numbers came in at 401,000 vehicles sold this year, up about 15 per cent from last year.

The post March sales strong, just not as strong as desired appeared first on Auto Service World.

High initial costs, range anxiety and lack of charging options are keeping many away from considering buy an electric vehicle, a recent survey found.

A recent survey from Refused Car Finance found that 66 per cent of respondents in the U.K. are not considering an EV for their next car purchase. The survey noted a reluctance among drivers who do not currently own an electric vehicle to make the switch, despite the environmental and economic benefits touted by EV advocates.

While electric vehicles are lauded for their lower operational costs and positive environmental impact, these advantages have yet to sway a large segment of potential buyers. The cost factor is particularly significant, as EVs typically feature newer, pricier technology and are produced in smaller quantities, though options for financing and a growing second-hand market are available.

Range anxiety remains a prevalent concern, with 61 per cent of those surveyed worried about the electric range of EVs and the potential for spending more time recharging than driving. The survey indicated that many drivers estimate the average mileage capacity of an electric car in 2024 to be between 181 and 240 miles (291-386 km) — a figure close to the actual average of around 211 miles (340 km), although this can vary by make and model.

The availability of charging infrastructure is another hurdle. Despite there being over 53,000 charging points across the UK, drivers express doubts about their adequacy.

Among those surveyed who already own an EV, two-thirds expressed satisfaction with their purchase, citing low running costs, zero emissions and an enhanced driving experience as key benefits. These owners view traditional petrol and diesel vehicles as less appealing options.

The post Why some won’t buy an EV appeared first on Auto Service World.

Image credit: Depositphotos.com

Canadian vehicle owners are continuing to ignore oil change needs, updated research has found.

The Automotive Industries Association of Canada released its latest look at consumer behaviour. It sheds light on where Canadian vehicle owners are deficient in their knowledge and where opportunities are for the automotive aftermarket.

Free for members, it examines the habits of Canadians across various segments such as age, income, region and type of vehicles they own. The report is $199 for non-members.

The report, Canadian vehicle owner’s attitudes towards maintenance and repair, shows that Canadians put oil changes at the top of the list of services they are letting slide. It’s followed by checking oil and a trio of tire related needs: Changing them, checking wear and checking pressure.

About 2,000 Canadians were surveyed in March 2023. They said they spent almost $400 on maintenance plus about another $650 on repairs.

They find the windshield sticker to be most helpful to remind them about maintenance needs. That was followed by dashboard messaging, e-mail reminders and text messages.

Fewer than half (44 per cent) of Canadians claim to be somewhat knowledgeable when it comes to vehicle maintenance and repair. About one in 10 claim to be very knowledgeable.

Four in 10 (41 per cent) don’t consider vehicle maintenance and repair to be a high priority, the research found. Fewer than a third (31 per cent) view vehicle repair and maintenance as easy with 57 per cent say it’s somewhat easy.

The post Canadians letting same maintenance slide appeared first on Auto Service World.

Image credit: Depositphotos.com

It would appear that those with electric vehicles don’t have concerns about range, new data suggest.

According to S&P Global Mobility’s analysis of the vehicle types that put up the most kilometres on the odometer, diesel and natural gas top the list while electrics came third, ahead of traditional gas-powered vehicles.

Battery electrics in Canada travelled more than 19,000 km in 2023. Plug-in hybrids were just behind that total by a little more than 1,000 km. Traditional internal combustion engine vehicles travelled about 16,600 km.

Both diesel and compressed natural gas vehicles travelled about 21,000 km last year, largely due to the fact most vehicles equipped with these propulsion systems are fleets and last-mile delivery vehicles.

“Typically Class 2, Class 3 trucks — they’re vans, they may be used for commercial work, last-mile delivery. And so they’re naturally going to get more kilometres per year,” explained Todd Campau, aftermarket practice leader at S&P Global Mobility.

The fleet side of things is where electrics are trying to penetrate. But the demands on weight for transporting goods or moving goods around for a day’s work are still a challenge.

“That’s not where the electric vehicle right now shines,” Campau said during the webinar, Insights on Vehicle Miles (Kilometres) Travelled in Canada, hosted by S&P Global Mobility.

Still, these numbers show that when consumers buy an EV, they’re not letting it sit parked in their driveways or garages.

“But definitely as you start to think about how can we move people toward electric vehicles, one of the things that we clearly have found is that when people do make that shift, those vehicles are getting used very similarly to what their non-electric counterparts were,” Campau said.

The post Canadians with EVs drive more than ICE drivers appeared first on Auto Service World.

Scotiabank’s fifth Worry Poll has unveiled Canadians’ complex feelings about their financial situations, revealing a landscape of both concern and resilience.

While the overall time spent worrying about finances has decreased, those who do worry are spending more hours than before, averaging 17.7 hours, with the main concerns being day-to-day expenses (50 per cent), debt reduction (40 per cent), and emergency savings (40 per cent).

Nearly a quarter of Canadians (23 per cent) anticipate an improvement in their personal finance situation over the next six months.

“Despite a small percentage of Canadians feeling cautiously optimistic, the majority are still experiencing significant financial stress,” said Kingsley Chak, senior vice president of deposits, savings and investments at Scotiabank, highlighting the dual nature of current financial attitudes. “However, it’s promising to see proactive steps being taken to seek financial advice,” he said.

The poll also spotlighted Gen Z’s proactive approach to managing finances, engaging in cost-saving measures more than older generations. Notably, 42 per cent of Gen Z shoppers compare prices at multiple grocery stores, and 43 per cent redeem loyalty points, significantly higher than the figures for Boomers. Both Gen Z and Millennials are heavily reliant on their financial institutions for advice on investment, financial management, and tuition payments, with around a quarter having extra money to invest.

Chak expressed optimism about the proactive stance of younger Canadians. “We’re encouraged by the optimism of younger generations and their eagerness to seek financial advice.”

The report also provides a geographical perspective on financial stress across Canada, indicating that financial concerns vary by region. Ontarians (35 per cent) report the highest levels of financial stress, attributed to the high cost of living, followed by Atlantic Canada (27 per cent) and Manitoba/Saskatchewan (26 per cent). In contrast, Quebecers report the lowest levels of financial stress (14 per cent).

The post What Canadians are prioritizing with their finances appeared first on Auto Service World.

Canadian millennials are increasingly being priced out of car ownership due to inflation, a recent study has revealed.

Those being hit hardest are between the ages of 25 and 34, according to the Car Ownership Index from Turo, a peer-to-peer car-sharing marketplace. It found that 56 per cent of young millennials are less inclined to purchase or lease vehicles this year — compared to 46 per cent across all age groups.

Last year, the percentage of Canadians reconsidering car ownership was lower with 39 per cent showing a level of financial caution related to vehicle ownership. The findings indicate a shift in Canadians’ approach to car ownership, exacerbated by financial concerns that have escalated over the past year.

The index pointed to a growing trend of economic conditions affecting Canadians’ decisions on car ownership. Nearly two out of every five (37 per cent) respondents without a vehicle stated that high costs are the primary deterrent — an increase from 32 per cent the previous year.

The index shed further light on the struggles young millennials face in maintaining or acquiring a vehicle. Almost one in five (17 per cent) of young millennials plan to forego owning or leasing a car in the future, compared to 12 per cent across all demographics. Among those young millennials aiming to cease owning or leasing, more than half (52 per cent) cited financial difficulties as the main reason, surpassing the 42 per cent average across other age groups. The study also reported that the annual estimated cost of car ownership for young millennials stands at $6,176, above the $5,025 average for all ages.

Despite these challenges, the necessity of having a car remains high, with 85 per cent of Canadian respondents currently owning or leasing one. Even though these vehicles remain unused 95 per cent of the time, three-quarters (78 per cent) of car owners claim that living without a vehicle would be unfeasible, and 57 per cent of working individuals said they would need to change jobs if they lacked access to personal transportation.

The post Inflation’s impact on vehicle ownership appeared first on Auto Service World.

There has been a recovery in new vehicle sales, an important signal for the future of the automotive aftermarket. But how much longer can it last?

DesRosiers Automotive Consultants reported February 2024 new sales were the highest ever for the month. Canada has seen 16 straight months of year-over-year improvement.

The consultancy credited the movement to pent-up demand caused by consumers’ inability to replace their older vehicles, either out of desire or need. Managing partner Andrew King noted that supply constraints “are now well and truly in the rear-view mirror.”

But Todd Campau, aftermarket practice leader at S&P Global Mobility, cautioned during AAPEX 2023 that there are challenges taking place that are working against growth continuing.

One, pent up demand can’t go on forever. He sees it eventually dissipating, if it hasn’t already.

“We don’t think pent-up demand is there anymore. We believe that the economic situation that we went through over the past year has really kind of destroyed that demand rather than delayed that demand,” he said during his presentation, Trends Impacting the North American Aftermarket.

“Because what we’ve essentially seen is, we had supply constraints through much of late ’21 and ’22 when we couldn’t get microchips and all those things. That has shifted to being demand constraints — so consumers are slowing in their purchasing now. Inventories are building that dealership lots.”

Campau doesn’t think we’re going to get to a point where dealership lots become overstocked with inventory as vehicles will still sell. Just maybe not as quickly as we’re used to.

“I think they’ve learned a lot about the consumer and that may change their behaviour on the new vehicle inventory levels … but it certainly has recovered,” he added.

Some of those changed behaviours include being willing to buy a vehicle online or wait for the vehicle they want, rather than take one in the showroom.

“And so I think we’re probably about at a level of in inventory where we’re going to live going forward,” Campau said.

And prices are still high for new vehicles. DesRosiers reported third-quarter data that show the average transaction price for a light vehicle was at nearly $53,000, up almost 6 per cent from the end of 2022. It’s a similar story in the U.S. where the price of a new vehicle sits at nearly US$46,000, according to S&P Global Mobility. But prices south of the border have been flat over the last few quarters.

“The past few years, I’ve been telling you that I don’t know if [high prices are] sustainable. And I’m still not sure it’s sustainable,” Campau said.

Also factoring in is the lack of rebates being offered by manufacturers. Right now, there are about half the number of rebates or deals today compared to the past.

“OEs really seem to be showing a reluctance to put the money back on the hood that they used to put on the hood because they just don’t have to right now,” Campau said.

“And so far, consumers are continuing to buy those vehicles, which kind of surprises me at that price level.”

The post Will new vehicle sales growth eventually drop off? appeared first on Auto Service World.

Image credit: Depositphotos.com

When it comes to vehicle miles travelled and gasoline consumption — and the need to have vehicles serviced by the automotive aftermarket — these factors are greatly influenced by consumers and drivers depending on their income bracket.

And it’s changing how retailers should think about what products they’re carrying on their shelves and the customers coming through their doors, according to Nathan Shipley, executive director of industry analysis in automotive at Circana.

Most people who don’t have to commute to work are generally higher-income earners. But they’re still racking up miles and kilometres on their odometers.

“It’s a higher-income consumer that is not having to go to an office. They’ve been untethered from their office and they’re able to work from anywhere,” he said at AAPEX 2023. “And so they’re taking road trips while still working.”

So even though that consumer isn’t heading into the office five days a week, they’re on the road more because they’re travelling. All that mileage is seeing them continue to go into their auto shop for service and maintenance.

And so their spending in the aftermarket is likely off-setting the lower-income households that are delaying vehicle maintenance.

“That higher-income consumer, I believe, will continue to help things coast along for the foreseeable future,” Shipley said during his seminar, Aftermarket Outlook 2024.

“The high-income consumer is the one that’s changed the most.”

Traditionally, it’s been the lower income, sub-$50,000 bracket households that used the aftermarket the most — people who couldn’t afford a new car and spent money on keeping their current one running. During the pandemic, that changed — higher-income households spent money in the aftermarket. Reasons vary from low new supply reducing their options at the dealership to taking money they typically spent on vacations to instead put towards their current vehicle.

“And if you asked me maybe one year, two years ago, I would have guessed this is not going to sustain,” Shipley said. “People are going to start buying new cars again and they’re going to be back in offices. They’re not going to be working on their cars. And that is not what’s actually taking place.”

So in what Shipley called an “interesting trend,” it’s the $100,000-plus income group that’s the top contributor to units sold in the aftermarket.

The last few years have been headlined by people buying recreational vehicles, jet skis, snowmobiles and the like. “That drives DIY behaviour. But it’s that consumer that has more time on their hands,” Shipley explained. “Maybe they owned a car during the pandemic that was under warranty — it was going back and forth for oil changes [while] under warranty — and all that expired. Now the car’s four or five years old and they’re not going back to replace it.

And they figure that since they have more time on their hands, they’ll DIY some things.

“So it starts to have implications on: Who’s in stores, what products are sitting on the shelves, how are we promoting our products in store?” Shipley explained. That’s a change from previously targeting the lower-income consumer. “But now it’s this higher-income consumer that they approach spending differently. It changes how you go to market as a brand or as a retailer.”

The post The effect of higher income customers on the aftermarket appeared first on Auto Service World.

Image credit: Depositphotos.com

March is typically the start of the traditional selling season for new vehicles in Canada. But if February was any indication, that season my have already begun.

Last month was “easily the strongest February of all time,” according to DesRosiers Automotive Consultants. The company is estimating “an astounding” 129,000 units sold, a 24 per cent increase over February 2023.

The consultancy pinned the results on “the deep well of pent-up demand from the ‘lost sales’ of the past four years.” Managing partner Andrew King further added that the results show that “some of the hurdles of recent years — and specifically the supply constraints of new vehicles — are now well and truly in the rear-view mirror.”

The seasonally adjusted annual rate for the month hit 2.11 million units, a number not seen since January 2018.

The market has now seen 16 straight months of year-over-year growth.

“This is even more remarkable given that Canada has been in the midst of a per capita recession throughout the past year,” DesRosiers noted. “March brings the start of the traditional spring selling season, which should hopefully provide an indication as to how long pent-up demand can remain as the dominant market dynamic, in the face of increased vehicle prices and high interest rates.”

The post New car sales boom ahead of traditional selling season appeared first on Auto Service World.

Average vehicle age has been on a sharp rise in recent years and it will continue to for several more, an industry observer predicted.

At AAPEX 2023, Todd Campau, aftermarket practice leader at S&P Global Mobility, talked about the factors driving vehicle age upwards. His group reported this year that the average age of a vehicle in the United States is 12.5 years. That’s the highest it’s ever been.

No updates have been made for Canada since 2020. At that time, AIA Canada reported average age at 9.7 years. Industry experts believe that number is around 10.5 years today. That, too, would be a record high for this country.

“We’ve continued to set records,” Camapu said during his presentation, Trends Impacting the North American Aftermarket. “I think the real note in average age is the rate at which it’s been climbing. Average age typically does stay pretty consistent or climbs very slightly. The past few years, it’s been climbing pretty rapidly and it’s continuing to look like it’s going to climb pretty rapidly for a couple more years.”

New vehicle sales are climbing, but slowly. So that influx of new vehicles to bring down average age hasn’t been coming at the typical pace it used to be before the pandemic. Supply chain issues and high interest rates will continue to suppress new vehicle sales for the next little while.

“I think we’ll see the average age continue to climb probably through 2025,” Campau predicted. “And then it’ll probably begin to settle down into a more normal growth rate again.”

This is a positive sign for the auto care industry, he pointed out. It indicates the industry will be healthy going forward.

“All good news for the aftermarket when it comes to the vehicle fleet. It’s growing, it’s aging, people are keeping their vehicles on the road for a longer period of time,” he said. “All that means more repairs coming to our bays, more tires that need to be replaced more brake jobs, more oil changes and everything. So good news, in general for the aftermarket.”

The post How much longer average age will climb appeared first on Auto Service World.

Zero-emission vehicles entering Canadian roads finished 2023 well ahead of where they placed the year before, with the fourth quarter holding on to gains made throughout the year.

And there’s perhaps an unexpected region of Canada that ranks third in EV adoption in the country.

Overall, ZEVs accounted for 11.7 per cent of new vehicle registrations last year, up from 8.9 per cent in 2022, according to S&P Global Mobility’s fourth quarter and year-end Canadian Automotive Insights report.

Breaking things down by category, battery electrics made up 8.8 per cent of new registrations in 2023 (up from 7 per cent in 2022) while plug-ins accounted for 2.8 per cent (1.9 per cent in 2022). Hybrid electric vehicles were 10.7 per cent of the market last year, compared to 7 per cent the year before.

Internal combustion engines accounted for 77.6 per cent of new registrations in 2023, down from 84.1 per cent the previous year.

However, after three straight quarters of growth, ZEV sales were generally flat from the third to fourth quarter but some regression nevertheless. BEVs went down a tenth of a percentage point to 10 per cent, plug-ins were flat at 3.2 per cent and hybrids dropped four-tenths of a point to 11.2 per cent in Q4 2023.

S&P highlighted that volume increases in the final quarter were led by Audi’s Q4 E-tron and the VW ID.4. For the year, the Tesla Model Y and Mitsubishi Outlander led in volume increase with the Model Y representing nearly 20 per cent of the market.

And the market is set to see many new options making an entrance.

“Looking ahead for 2024, we anticipate the launch of several battery electric vehicles in Canada, including the Tesla Cybertruck, GMC Sierra EV, Audi Q6 E-TRON, Kia EV3 and Honda Prologue, among others,” the report stated. “The plug-in hybrid electric vehicle market is also set to expand with the introduction of models such as the Mazda CX-50, Hyundai Santa Fe, Ford Ranger, and Volkswagen Golf, to name a few.”

Going by province, British Columbia leads the country again in adoption rates with nearly 23 per cent of new registrations a ZEV. Quebec, however, made significant strides, jumping from 13 per cent ZEV registrations in 2022 to more than 20 per cent.

When looking strictly at BEVs, B.C. (18.8 per cent) and Quebec (15.2 per cent) one again lead the way.

But the Yukon ranks third — tied with Ontario — at 5.9 per cent BEV registration share. That number is up 2.6 points from 2022. With ZEVs overall, the territory saw 9 per cent of new vehicle registrations in that category.

Ontario saw very little growth in both ZEV (7.72 per cent, up 0.81 points) and BEV (5.9 per cent, up one-tenth of a point) adoption rates.

In the Atlantic provinces, Nova Scotia (138.2 per cent), New Brunswick (105.2 per cent) and Prince Edward Island (133.9 per cent) all saw large year-over- year growth rates.

The Chevrolet Bolt EUV emerged as the top ZEV model in Quebec. Compare that to British Columbia, where the Tesla Model Y holds the highest registration volume across all models.

“This disparity in Quebec could be a key factor behind Tesla’s decision to reduce the price of Model Ys in an effort to gain more market share,” S&P observed.

The post Electrics, hybrids make gains in Canada appeared first on Auto Service World.

Image credit: Depositphotos.com

The Canadian used vehicle market in 2023 has been marked by a series of contrasting developments, a new report has found.

Initially, used vehicle prices stayed significantly high due to a tight supply. However, as the new light vehicle market began to recover in the latter half of the year, a shift occurred with consumers starting to lean towards newly available vehicles.

Andrew King, Managing Partner at DesRosiers Automotive Consultants noted the changing landscape.

“With the resurgence in the new vehicle sector, the ensuing years for the used vehicle market are poised to be intriguing,” he observed.

He highlighted the impending scarcity of recent model year used vehicles due to declining off-lease numbers and noted that factors like rising new vehicle prices, zero-emission vehicle (ZEV) mandates, and changes in financing are expected to keep the used market dynamic into 2024 and beyond.

A survey conducted among UCDA (Used Car Dealers Association) members revealed that sales volumes varied significantly between franchised new vehicle dealers and independent used vehicle dealers in 2023. Franchised dealers reported average sales of 311 units, while their independent counterparts reported 160 units on average.

Looking ahead to 2024, both groups are optimistic about sales growth, with average unit sales anticipated to increase from 203 to 224. Specifically, franchised dealers expect a rise to 341 units, while independent dealers foresee an increase to 177 units.

The survey also addressed concerns regarding vehicle supply and sourcing over the past six months. Independent dealers reported worsening supply conditions, while 37 per cent of franchised dealers experienced improvements, correlating with increased new vehicle sales and trade-ins. In contrast, a smaller fraction of franchised dealers faced challenges in sourcing used vehicles.

The post The dynamic shifts facing the used market appeared first on Auto Service World.

Image credit: Depositphotos.com

Once new internal combustion engine vehicles can’t be sold in Canada after 2035, these vehicles will still make up a significant portion of vehicles in operation.

Several U.S. states have also said they’ll prohibit sales of ICE vehicles after 2035. The U.S. has a national goal proposed of two-thirds of vehicles sold by 2032 to be zero-emissions.

But just how many ICE vehicles will stick around past the mid-2030s — and for how long? Perhaps a hint to that answer can be found by looking at an island in the northern Caribbean Sea.

If one were to look at Cuba, the way they have maintained and operated vehicles could be a lesson that could keep ICE vehicles in circulation for many more years, even decades to come.

Todd Campau, aftermarket practice leader at S&P Global Mobility, described the ‘Havana Effect’ at AAPEX 2023.

“They got a bunch of old cars running around still that very innovative people have figured out how to keep running 60, 70 years later,” he said during the presentation, Trends Impacting the North American Aftermarket. “Obviously, they have a pretty friendly climate; they don’t have to deal with rust as much as we do.”

This attitude could spill over to North America as EVs present affordability issues to many consumers. They may opt to continue to invest in their ICE vehicle as a more affordable option for EVs.

“I think this is the challenge,” Campau said. “If we push too hard on shifting the fleet, then does it create situations where people can’t afford an EV and so they have to keep their ICE vehicle working even longer than they would have before?”

There’s a lot we still don’t know about EVs due to their infancy. They may not prove to be reliable vehicles in the long term.

“We don’t know how well they’re going to perform in the used vehicle fleet because we’re just starting to see them move that way in volume; they’re just starting to get old enough. We also don’t know how long they’re going to live overall, or how many owners they’re going to see overall,” Campau said. “There’s assumptions that they’re going to behave like internal combustion vehicles, but that’s just assumptions right now, What if they don’t last for 20-plus years?

Average vehicle age in the U.S. is 12.5 years (and estimated to be 10.5 in Canada). So there are a lot of 16-20-year-old vehicles on the road right now. And right now, it’s higher-income households that are buying EVs as they’re the ones who can afford them.

“So what if these vehicles don’t last? What if they don’t flow through the market like their internal combustion counterparts always have? What’s the social impact if there’s not an EV for a lower-income household to buy after it’s been owned for 10 years by the new owner?” Campau wondered. “So these are all questions that we’re wrestling with.”

The post What’s the future of ICE vehicles? appeared first on Auto Service World.

Volvo’s Matt Girgis stands in front of the newly unveiled EX90 at the 2024 Canadian International AutoShow

There is still a large knowledge gap between fact and fiction when it comes to electric vehicles in Canada, representatives from several automakers acknowledged recently.

They understand it’s something they need to work on as electrification moves forward. At the Canadian International AutoShow this year, Auto Service World spoke to representatives from Chevrolet, Stellantis, Ford and Volvo about electrifying the car parc.

Holly Broome, national marketing manager of Chevrolet cars and crossovers, emphasized the important role of education in overcoming range anxiety and other consumer concerns holding Canadians back from making the switch to electric.

“We have to do a lot more education to help customers understand what owning an EV is really like,” she said.

For example, most charging is done at home, reducing pressure on public infrastructure.

“Once folks realize that it puts less pressure on needing to understand the infrastructure when they’re out and about on the road.”

Stellantis has put out its first fully electric vehicle, the Fiat 500e.

“Part of introducing that vehicle is definitely educating consumers on what it’s like to live with a battery electric vehicle,” explained Brad Horn, product communications manager at Stellantis Canada. “It’s even started with things like educating people on how the federal EV incentives or the provincial ones because that vehicle is going to be introduced in B.C. and in Quebec first.”

The company now plans to have half of its vehicle sales be electric by 2030.

“So while we will build the EVs and market them, we have six of them coming this year, there will still definitely be internal combustion, or PHEV vehicles in our lineup. It’s going to be sort of a mix, and it will have something that will address everybody’s wants.”

And there’s Volvo, which will fully electrify its fleet by 2030.

“Our purpose as a company [is to] provide freedom to move in a personal, sustainable and safe way,” observed Matt Girgis, managing director of Volvo Car Canada. “And we just see the natural evolution of our safety DNA, transitioning into sustainability, which, of course, a big part of that is to reduce tailpipe emissions. So this is our Ambition 2030. And we’re committed to that.”

As for the education concept, he noted that the early adopters have bought their EVs and now it’s time to attract the next group of buyers.

“We do see that there is a bit of anxiety still around range, around accessibility,” he said about the next group of buyers.

Over at Ford, they say they understand what the issues are and they’re working to address those concerns.

“So if we take range, for example, so we’re always working on our product to improve range,” said Alexa Desjardins, vehicle line manager for BEV and commercial vehicles, at Ford Motor Company of Canada. “So our engineers are so focused on driving every single kilometre of range that we can get in our vehicles, and we give it to our owners. It’s not just in the new products. We give it through over-the-air updates as soon as there are updates.”

She pointed to range concerns and consumers being so focused on how far a vehicle can go on a single charge, pointing to daily use cases. For longer road trips, options are expanding.

“And now we just made a deal with Tesla, where we’re going to unlock 15,000 Superchargers in the spring for our customers,” Desjardins said. “And so we’re always looking at improving our customer experience from a charging perspective.”

Auto Service World will be sharing the full conversations with each brand spokesperson in the coming weeks, so stay tuned for more details about what they have planned.

The post Plenty of EV education still needed: Automakers appeared first on Auto Service World.

Vehicle kilometres travelled by Canadians have fallen back to Earth and substantially subsided, according to new data from AIA Canada.

The Vehicle travel trends in Canada: Q1 2020 to Q4 2023 report shows that Canadians eagerly got behind the wheel in 2022 before tailing off and hitting a four-year quarterly low to close out 2023.

AIA Canada partnered with Inrix, which manages vehicle traffic data, and researcher Clarify Group on the report. It shows median kilometres travelled, number of trips and average distance travelled compared to a baseline — represented as a fraction of what would be expected without a global pandemic.

“This baseline provides us with a ‘typical’ period before COVID-19 so we can observe if, when, and where mobility trends among passenger vehicles are returning to pre-pandemic levels,” the report stated.

Kilometres travelled in Q4 2023 were down 58 per cent from the same time the year before. Even the middle quarters, which cover the summer months, saw significant reduction in kilometres travelled compared to 2022.

The slowdown was attributed to a weakening economy as higher interest rates, inflation and energy costs take a toll, as well as changing work practices.

“Shorter trip durations compared to other quarters suggests a tendency for drivers to take more local journeys compared to longer drives, especially with work from home,” it added.

It also warned that fears of a recession could result in miles travelled flatlining.

“On the other hand, given that several macroeconomic indicators like employment, immigration, and gross domestic product (GDP) remain stubbornly positive, continued VMT growth remains possible,” the report stated.

The full report includes national and province-by-province breakdowns across the categories as well as further insights. It is available for free to AIA Canada members and $399 for non-members.

The post Canadians tap brakes on vehicle usage appeared first on Auto Service World.

Image credit: Depositphotos.com

While the automotive aftermarket will see a growing number of older vehicles in need of servicing, the overall lifespan of vehicles hasn’t been significantly altered following the depths of the COVID-19 pandemic, one expert suggested.

Furthermore, noted Todd Campau, aftermarket practice leader at S&P Global Mobility, the automotive industry is observing a return to pre-pandemic levels in terms of annual kilometres travelled by vehicles.

While not wanting to label current driving trends as either a new normal or a return to normal, Campau highlighted that annual mileage has largely returned to expected levels.

“From an annual mileage perspective, that’s returned to pretty much what we would expect and call normal going forward,” he said during the webinar, Insights on Vehicle Miles (Kilometres) Travelled in Canada, hosted by S&P Global Mobility.

The more noticeable impact of the pandemic is evident in the estimated odometer readings over a vehicle’s lifetime. The two years of multiple lockdowns and increased remote and hybrid work essentially acted as a pause button, particularly for those who used their vehicles mainly for commuting.

“If a vehicle was expected to last, let’s say, 300,000 km before the pandemic, it’s still likely to last 300,000 km after the pandemic,” Campau explained, adding that during the height of the pandemic, vehicles typically used for commuting saw a dramatic reduction in usage, accumulating far fewer kilometres than in typical years.

This decrease in usage is expected to extend the average age of vehicles. Rather than driving the expected 20,000 km per year, some may have driven 5,000 km. Maybe even less.

“Because the kilometres travelled paused for essentially a year or two, we could see another year or two on the average age of the vehicle,” Camapu said.

This extension of vehicle lifespan is primarily due to lower odometer readings, as vehicles did not accumulate as many kilometres during 2020 and 2021.

However, Campau noted that it’s important to note that this trend is not uniform across all drivers. Essential workers, such as nurses and doctors, continued to drive their vehicles as much as, if not more than, before the pandemic. Consequently, not all vehicles will show the same reduction in odometer readings.

The post Why average age will keep going up appeared first on Auto Service World.

Image credit: Depositphotos.com

Owning a car in Canada has become significantly more expensive thanks to the surging cost of living and climbing interest rates, putting additional financial pressure on Canadian families.

The average monthly cost of car ownership reached $1,387, or $16,644 annually, as reported by Ratehub.ca, an online financial comparison platform.

The report, which draws on data from various sources including Statistics Canada and AutoTrader, broke down the average cost of car ownership into several components. Canadians now spend approximately $200 monthly on gas, $200 on parking, $111 on car insurance, $79 on vehicle maintenance and about $195 on interest from car payments.

Moreover, the automotive market has seen a steep increase in the cost of vehicles. As of September 2023, the price of new cars has climbed by almost 20 per cent year-over-year, with the average new car price reaching $67,817, according to AutoTrader. Similarly, used car prices have risen by 4.3 per cent, with the average used car now priced at $39,155.

The report suggested that for those residing in major cities and not reliant on personal vehicles, forgoing car ownership could lead to substantial savings.

“For the $1,387 we estimate it costs to own a car, a family of four can get unlimited travel on the TTC for as little as $286 per month,” the report said. “That leaves over $1,000 for Ubers and occasional car rentals.”

The automotive sector’s current predicament is partly due to a supply-chain crisis triggered by a global shortage of semiconductor microchips, essential components that power everything from airbags to key fob remotes. The onset of the COVID-19 pandemic in 2020 saw the auto industry pause production, while chip manufacturers shifted their focus to the booming electronics market for cellphones, TVs, and computers.

Unexpectedly, the auto industry rebounded quicker than chip suppliers could accommodate, driven by consumers eager to avoid public transit and shared rides amidst the pandemic. This mismatch between low supply and high demand has been identified as a significant contributor to the soaring prices of new vehicles.

The post How much car ownership costs these days appeared first on Auto Service World.

Image credit: Depositphotos.com

A recent study by J.D. Power reveals a noticeable decline in vehicle dependability three years post-purchase, marking a concerning trend for vehicle owners across the U.S.

The 2024 U.S. Vehicle Dependability Study highlighted an increase in the number of problems encountered by nearly two-thirds of automotive brands, with the industry average hitting 190 problems per 100 vehicles (PP100), up from 186 PP100 in the previous year. This four-point year-over-year increase underscores a growing issue in long-term vehicle reliability, the group noted.

Frank Hanley, senior director of auto benchmarking at J.D. Power, pointed out the unusual nature of the deterioration, attributing it to the challenging production period these vehicles underwent.

“This can likely be attributed to the tumultuous time during which these vehicles were built, and owners are keeping their vehicles for much longer,” he said. “In fact, the average age of vehicles on American roads today is approximately 12 years, which underscores the importance of building a vehicle designed to stand the test of time. Automakers must ensure new vehicle technology introduced today will still meet the customer’s needs years down the road.”

The 35th annual study, which assesses 184 specific problem areas across nine major vehicle categories, found that infotainment systems are the most significant source of owner frustration, with issues nearly double those of the next problematic category, exterior. Notably, connectivity problems with Android Auto and Apple CarPlay, along with built-in voice recognition difficulties, top the list of infotainment system grievances.

Another area where dissatisfaction has grown is with driver assistance system alerts. Despite owners having three years to acclimate to their vehicle’s alert systems, complaints have increased, particularly with features like lane departure warnings and automatic emergency braking.

The study also reveals that electrified vehicles, including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), report more problems than their gas-powered and hybrid counterparts. BEVs, in particular, present the highest level of issues (256 PP100), with a notable 39% of BEV owners having replaced their tires in the past year, a figure significantly higher than that of gas-powered vehicle owners.

Lexus ranked highest overall in vehicle dependability for a second straight year, scoring 135 PP100. Among premium brands, Porsche (175 PP100) placed second and BMW (190 PP100) ranked third.

Toyota topped the mass market segment, with a score of 147 PP100. Buick (149 PP100) placed second, while Chevrolet and Mini (174 PP100) each rank third in a tie.

The post When vehicle owners say dependability declines appeared first on Auto Service World.

Image credit: Depositphotos.com

New vehicle sales for January 2024 were the highest they’ve been in the last couple of years, according to DesRosiers Automotive Consultants.

Year over year, the gain was about 15 per cent as monthly sales went from about 98,000 in 2023 to almost 113,000 this year.

In fact, Andrew King, managing partner at DesRosiers noted, this year’s sales level is even higher than the same month in 2019. He credited the pent-up demand effect as helping the surge.

“While inventories remain tight in a couple of critical segments, the market is moving back into a more normal environment in which demand (rather than just supply) plays a more central role in determining sales volumes,” he said.

With that, the seasonally adjusted annual rate for vehicle sales for January came in at 2.06 million — that’s the first time the two-million mark has been crossed since February 2020.

DesRosiers’ announcement did note that the first signs of weakness do seem to be appearing in some markets. However, the group is taking the win and celebrating the achievement.

The post Year starts strong for new vehicle sales appeared first on Auto Service World.

Image credit: Depositphotos.com

Canadian vehicle preferences continued to trend toward light trucks over passenger cars in 2023.

DesRosiers Automotive Consultants reported that the light truck segment outperformed passenger cars, with overall truck share breaking the 85 per cent mark for the first time.

For the year overall, light truck sales rose by 14.4 per cent, while passenger car sales saw a slight decrease of 1.6 per cent.

“The past year proved to be a successful one for new light vehicle sales, particularly in the final two quarters,” said Andrew King, DesRosiers’ managing partner.

The group noted that the Canadian automotive market experienced a notable upswing in 2023, with reporting manufacturers collectively selling an additional 175,000 units compared to the previous year.

The group also reported that most vehicle segments saw a boost in sales last year but one stood out from the rest: Luxury sport cars.

The compact SUV segment retained its position as the highest-volume category in the country. However, the most significant percentage growth was seen in the luxury sports car segment, surging 48.2 per cent in sales, DesRosiers reported.

Luxury sports cars, traditionally a small and fluctuating market segment, defied the trend of declining passenger car sales. Most models in this category recorded double-digit sales increases, with the Chevrolet Corvette and Nissan Z achieving particularly notable gains. The more mainstream sports car segment also experienced a substantial rise, with a 27.5 per cent increase in sales. Compact SUVs saw a 27.7 per cent sales growth over 2022.

Despite the overall market growth, six of the 19 segments reported sales decreases. The subcompact segment suffered the largest decline, dropping by 34.7 per cent, primarily due to the Chevrolet Spark exiting the market. Compact luxury cars also faced challenges with a 9.1 per cent decrease in sales compared to 2022. Small pickups saw a 7.8 per cent drop in sales.

The post How big the gap is between truck and car preferences appeared first on Auto Service World.

Image credit: Depositphotos.com

New vehicle inventory is normalizing at dealerships — but it doesn’t appear to be the right kind of inventory that will help sales numbers rebound to pre-pandemic levels.

While greater chip capacity is allowing for the normalization of vehicle inventory, Guido Vildozo, senior manager of light vehicle sales forecasting for the Americas at S&P Global, cautioned that it’s not necessarily the type of vehicles customers want.

“When we’re talking about a normalizing of inventory, we have to clarify: This is not the inventory we had in 2019,” he said at Canadian Black Book’s Talk Auto conference event near Toronto in the fall.

Take a look at what’s been sold over the last two years, he told attendees. Automakers, with fewer resources, put those into vehicles that would get them the biggest return on investment — those bigger, more expensive vehicles.

“We were focused on that Wrangler Gladiator Ultimate Package because we thought the zombie attack was going to come in right after COVID. That’s the kind of inventory we have right now. It’s not the stuff that is reasonable to most consumers; it’s not the kind of stuff that is affordable to most consumers,” Vildozo said.

“So yes, inventories from a larger picture perspective are starting to normalize … but it doesn’t mean that it’s the right product.”

DesRosiers reported that the 2023 third quarter saw average transaction price for a light vehicle hit nearly $53,000, up almost 6 per cent from the end of 2022.

At AAPEX 2023 in Las Vegas, Todd Campau, aftermarket practice leader at S&P Global Mobility, told his audience that high prices from automakers aren’t likely to be sustained.

“The past few years, I’ve been telling you that I don’t know if [high prices are] sustainable. And I’m still not sure it’s sustainable,” he said.

Prices are not sustainable because, as Vildozo noted, the right products aren’t available to consumers. The right products are those that are more affordably priced.

“When we’re talking about the right product [that is] anything priced below $40,000,” Vildozo said.

Those vehicles also have quick turnarounds. They’re on the truck, delivered and sold in about 12 days in North America.

“And that is the largest transformation we’re going to have, particularly as we’re navigating this landscape of high interest rates and low economic momentum,” Vildozo said. “We’re short on those vehicles. And that will continue to be a challenge — getting those vehicles out to consumers.”

The post New inventory is growing but why isn’t it the right inventory? appeared first on Auto Service World.

Image credit: Depositphotos.com

Most drivers would buy a car with less technology to protect their privacy, a study has found.

A recent survey report by Kaspersky reported that seven in 10 (72 per cent) of drivers are uncomfortable with automakers sharing their personal data with third parties. The report, Is my car spying on me?  reflects growing concerns about privacy and data security in the era of connected cars.

Despite the allure of modern vehicles equipped with advanced technology, sensors, apps and infotainment systems, the report found that most drivers are wary of how their data is used.

The survey of 2,000 U.S. drivers in November 2023 showed that 87 per cent of participants believe automakers should be obligated to delete their data upon request. Additionally, only 28 per cent of respondents claimed to have some understanding of the kind of data collected by their vehicles.

The findings come as the global automotive aftermarket wrestles with automakers and governments to enact a legislated right to repair solution, citing that automakers will have too much control over information that should be owned by consumers.

The trend of connected cars has not only improved comfort and convenience but also opened new revenue streams for car manufacturers through subscription services based on in-car technology.

However, this technological advancement has raised significant privacy concerns. A Mozilla report gave the auto industry poor ratings for privacy, highlighting that many car companies’ data policies allow them to share consumer data with third parties. Kaspersky noted that this not only creates privacy issues but also poses a security risk, as consumer data becomes increasingly vulnerable to leaks or theft.

This survey’s results indicate that while drivers may accept some level of data collection, they have clear boundaries regarding the use and security of their personal data. More than a third (37 per cent) of respondents expressed being “very uncomfortable” with automakers sharing their data, and 71 per cent would consider purchasing an older or less technologically advanced car to protect their privacy and security.

When presented with findings that none of the 25 car brands researched by Mozilla met minimum security criteria, 76 per cent of respondents expressed concern. The survey also explored drivers’ use of in-car technology, with many pairing their phones with their vehicles.

Nearly half (48 per cent) use services like Android Auto or Apple CarPlay, while 42 per cent of Bluetooth users choose not to share their phone’s address book with their car — a privacy measure recommended by experts.

Respondents had varying opinions on why automakers might collect data, with half believing it’s for selling to advertisers or third parties and 40 per cent thinking it’s for sharing with insurance companies. Two in five (42 per cent) respondents expressed concern about their car collecting personal data, with the highest level of worry among 18-24-year-olds.

Kurt Baumgartner, principal security researcher at Kaspersky’s Global Research and Analysis Team, emphasized the importance of privacy safeguards.

“It’s easy to take for granted how much your car knows about you,” said Kurt Baumgartner, principal security researcher at Kaspersky’s global research and analysis team. “A connected vehicle knows where you go, how fast you get there and what you listen to on the way — even potentially what your kids are doing in the backseat. And the data collection policies of many automakers go far beyond that, allowing them to track and share things like users’ marital status and other surprisingly personal information that gets connected through their phone.

“The bounds of property rights and ownership are clearly being bent, and people appear to be getting denied the level of control over their personal data that they expect. Our data is highly valuable, as is our privacy. As drivers, we need to advocate for privacy safeguards and common sense ownership agreements where we can enjoy the convenience of tech-enabled cars without having to give it all up.”

The post Drivers uncomfortable with automakers sharing their data appeared first on Auto Service World.

Image credit: Depositphotos.com

Canadians are increasingly focusing on financial stability amid rising inflation and economic uncertainty, a recent poll reported.

Debt repayment and savings topped the list of priorities, according to the latest CIBC Financial Priorities poll.

It found that 13 per cent of respondents consider paying down debt as their top priority for the year, a goal equally shared with saving as much as possible. Keeping up with bills in 2024 is another major concern, according to 12 per cent of Canadians.

Inflation, affecting 61 per cent of the population, along with rising interest rates (28 per cent), are the primary financial concerns this year. Despite these challenges, the majority of Canadians (67 per cent) believe the country is either heading into or is already in a recession. However, a significant portion (64 per cent) feels financially prepared for unforeseen events, and 60 per cent are confident in their financial stability to endure a recession.

The overall sentiment towards personal finances has remained relatively stable compared to last year. Two-thirds (64 per cent) of Canadians feel positive about their current financial situation. About a quarter (26 per cent) have incurred more debt in the past 12 months.

“With the increasing pressure on household budgets due to higher costs, it’s understandable that debt reduction is a key focus for Canadians,” said Carissa Lucreziano, vice president of CIBC Financial Planning and Advice.

The CIBC poll also highlighted various reasons for increased debt, including the higher cost of living (46 per cent), daily expenses exceeding monthly income (38 per cent), unexpected financial emergencies (17 per cent), increased borrowing costs (14 per cent), and loss of income (10 per cent).

If given a windfall of $5,000, 36 per cent of Canadians would add it to their savings.

Furthermore, the poll indicates that 70 per cent of Canadians find it challenging to plan due to the current uncertain environment. Job security is also a concern, with 42 per cent of employed respondents worried about their employment stability in the current economic climate.

The post How Canadians are prioritizing their finances appeared first on Auto Service World.

Image credit: Depositphotos.com

Households in Canada have accumulated an unprecedented amount of savings during the pandemic. But unlike the U.S., households here haven’t been drawing down on their savings at the same pace.

Thomas Feltmate, senior economist at TD Bank, noted that Canadians have been much more prudent with their money knowing that they’re facing rising prices all around them — especially as mortgage rates come up for renewal.

“And they’re basically just trying to keep some powder dry, some excess cash for when their mortgage ultimately rolls over and they’re faced with that headwind of a higher cost to service that debt,” he said at the Canadian Black Book Talk Auto 2023 conference.

Since Canadians are not drawing much from their savings, they’re not spending much in the automotive market.

“So I think we are starting to see some pullback on the consumer side of things. This is exactly what the Bank of Canada ultimately wants to see. We need to see weaker consumer spending over the next year or so such that we have further disinflationary pressure coming through,” Feltmate said.

This all comes back to high interest rates and the mortgage renewal shock that is set to play out in the near future.

“So by the end of [2023], we estimate that about 50 per cent of the outstanding stock of mortgages would have rolled over into this higher interest rate environment,” Feltmate reported. “But that still means over the next three years, we have another half of that the stock of mortgages still rolling over.”

Economists are especially focused on the 2025 and 2026 numbers. A lot of these renewals would have been pandemic buyers or those who last had their mortgage reset in 2020 or 2021 at a time when interest rates were at all-time lows.

So even the most optimistic scenario happens where the Bank of Canada has completely returned the interest rate to its typical 2.25 points by mid-2025, mortgage rates in 2025 and 2026 are probably still going to be in around 4-4.5 per cent, Feltmate said.

“And for homeowners or anyone that had their mortgage last reset in 2020 or 2021, when you could get a five-year fixed for 1.7 per cent, that’s going to be a meaningful repayment shock that these households are going to be faced with,” he added.

The post Canadians hanging on to their savings appeared first on Auto Service World.

Image credit: Depositphotos.com

Despite remote and hybrid work being an option for a chunk of the working population, the amount of time driving behind the wheel hasn’t fallen by the wayside.

DesRosiers Automotive Consultants reported gasoline consumption to have passed pre-pandemic levels. And according to Nathing Shipley, executive director of industry analysis in automotive at Circana, the automotive aftermarket can thank road trips.

At AAPEX 2023, he noted that when consumers were polled in the summer about trips, 60 per cent said they were going to take one and 58 per cent said they’d do so by car.

“So the road trip concept is very strong,” he said during his Aftermarket Outlook 2024 seminar.

Shipley further noted that workers are back in the office about 50 per cent of the time. “It’s been a slow and steady increase. But nowhere near where it was,” he noted.

And miles driven in the U.S. was only off by 1.5 points from 2019 numbers as of the fall of 2023. Todd Campau, aftermarket practice leader at S&P Global Mobility, said during a different session at AAPEX that 2023 could see that number actually surpass pre-pandemic levels.

“So if people aren’t driving to offices, how is miles driven still relatively strong? It’s because of this idea of, ‘I’m driving a lot where I live. I’m not driving to an office, but I do a lot of errands during the day.’ And the road trip concept is very strong,” Shipley said.

He further noted that half of remote workers said they’ve travelled for pleasure without taking time off in the last six months.

“The ability to hop in a car and wake up somewhere the next morning and take the Zoom call with your background still on is very real,” Shipley said. “The ability to work from anywhere is a very real thing.”

That allows these workers to make every weekend a long weekend.

“So you have consumers that are hopping in the car and taking a road trip and waking up wherever they’re going into work and from there. They’re able to get some work done, but then they’re able to have a long weekend wherever it is,” Shipley said. “And prior to the pandemic, if you were in office 8-5, Monday through Friday, it was really hard to have a meaningful trip over a weekend when you had to be back in the office Monday morning at night. So there’s been a fundamental change.”

The post Remote work is up. So is miles travelled. How? appeared first on Auto Service World.

After a few years of anything but normal, predictions out of the United States are calling good year ahead for car buyers as a level of normalcy returns to the marketplace.

Image credit: Depositphotos.com

After seeing swings in pricing, a cratering of supply and a spike in interest rates, a levelling out is expected, according to Cox Automotive.

“The past four years have been chaotic, even by auto industry standards, and have shifted many normal seasonal patterns out of whack, which adds to the difficulty of forecasting what comes next,” observed Cox Automotive chief economist Jonathan Smoke.

The group broke down the year ahead into three themes. First was slow economic growth, but no recession. Consumer spending will be limited as interest rates remain elevated to cool inflation. Still, the expectation is for interest rates to come down, though not significantly. Still, the drop will help improve vehicle affordability.

“Overall, the economy in 2024 may not be very exciting, but that is much better than the instability of a recession,” Cox’s report said.

Secondly, expect downward pressure on pricing as supply increases to pre-pandemic levels. This increase will lead to more discounts and incentives — though it won’t reach 2019 levels that saw discounting exceed 10 per cent of transaction prices.

“Market forces will likely exert downward pressure on vehicle prices, further improving consumer affordability,” Cox added.

And so comes the third theme: Saying goodbye to the seller’s market.

“Heading into 2024, dealers are less optimistic about the future due to interest rates and weaker profits,” Cox noted.

The report observed that new vehicle dealers will be challenged by increased manufacturer’s suggested retail prices and invoice prices due to material and labour costs and a further shift to pricier models. They’ll also face downward pressure on transaction prices. Profits will also take a hit from needing to invest in infrastructure to support the growing sales of electric vehicles.

That leads to the fourth theme of EVs and 2024 being the year of more — more models, more incentives, more sales muscle and more discounting.

“The Cox Automotive team expects that the automobile industry will fully acknowledge the need to convince average consumers of the benefits of electric vehicles,” the group said. “They also believe that many consumers may not easily be convinced.”

It believes 2024 will see sales eclipse 2023’s number of one million EVs sold in the country. “Furthermore, electric vehicles, plug-in hybrids, and hybrids combined are likely to account for almost 24% of the market, with electric vehicles alone accounting for more than 10% of total sales,” Cox said.

Finally, Cox believes this year will be the best year for consumers to buy vehicles since the pandemic.

“Our research suggests that Americans are putting more emphasis on buying/owning personal transportation, in contrast to 2018, when consumers put a higher value on ‘access to transportation,” it said. “After tumbling in 2021 and 2022, satisfaction with the car buying process is expected to improve in the year ahead, thanks in part to better inventory and the return of discounting, but also from improved processes at the dealership that save time and make car buying more efficient.”

The post Predicting the year ahead for new vehicles appeared first on Auto Service World.

Image credit: Depositphotos.com

While Canadians are seeing new vehicle transaction prices increase, Americans are seeing things trend in the other direction.

In the fall, DesRosiers Automotive Consultants reported that Canadians were paying an average transaction price (ATP) of nearly $53,000 at the dealership for a new vehicle as of the third quarter of 2023, That’s up 6 per cent from the end of 2022.

That’s still far cheaper than it is to buy a vehicle south of the border, though their prices have been moving downward. And automaker incentives have been on the rise.

Kelley Blue Book released data last month showing a marginal increase in the ATP of new vehicles in the United States as of November 2023. The ATP stood at USD$48,247 — about CAD$65,00 — marking an increase of less than 1 per cent from the previous month.

But that’s a 1.5 per cent decrease year-over-year. Notably, this decline represents the third consecutive month of year-over-year decreases, a rare occurrence over the past decade.

In a year headlined by economic uncertainty, new-vehicle sales incentives have increased, surpassing 5 per cent of the ATP for the first time since September 2021. This 136 per cent year-over-year increase in incentives indicates a shift towards a buyer’s market.

Despite lower ATPs, the data suggest that these reductions are due to discounts and incentives rather than a decrease in vehicle prices. In November, the average price fell to 98.3 per cent of the manufacturer’s suggested retail price (MSRP), the lowest since April 2021.

“While consumers may feel some relief in vehicle prices and incentives as we close out 2023, automakers and dealers are feeling the results of the downward price pressure,” said Rebecca Rydzewski, research manager at Kelley Blue Book publisher Cox Automotive.

She added that dealers are seeing profits contract as inventory levels return to normal as incentives are turned up to help stimulate sales.

Kelley Blue Book’s analysis of 35 brands revealed significant variances in pricing trends. Brands like Tesla, Buick, Land Rover, and Nissan saw the most significant year-over-year price declines in November, while Dodge, Ram, Audi, and GMC recorded the largest increases.

The luxury vehicle market is leading the downward trend in prices, likely stimulating sales during a typically strong period for luxury vehicle purchases. The average luxury vehicle price in November in the U.S. was $63,235, down 7.5 per cent year-over-year, with luxury brand incentives averaging 5.8 per cent of ATP. In contrast, non-luxury brands saw a slight price increase to $44,417, with incentives averaging 5 per cent.

Electric vehicles (EVs) also saw notable price shifts. The average price for a new EV in November was $52,345, up from October and 8.5 per cent higher than the industry average. EV incentives reached a peak of 8.9 per cent of ATP, significantly higher than the previous year.

Stephanie Valdez-Streaty, director of strategic planning at Cox Automotive, highlighted the narrowing price gap between EVs and internal combustion engine vehicles, noting that the EV premium has decreased from over 30 per cent to less than 10 per cent within a year.

“In recent months, price parity between EVs and ICE has almost seemed possible,” she said.

The post U.S. new vehicle prices drop appeared first on Auto Service World.

Image credit: Depositphotos.com

A recent study took a look at Canadian car-buying patterns, evolving preferences, and the resilience of consumers amid economic turbulence.

AutoTrader’s Automotive Trends Outlook sheds light on what Canadians are thinking about for their future vehicles and how the industry has changed over the last year for the years to come.

“Affordability is always an important consideration for vehicle shoppers, especially during these times,” said Jodi Lai, editor-in-chief at AutoTrader. “But when it comes to a milestone purchase as important as a vehicle, Canadians aren’t necessarily sacrificing spend. Although vehicle prices were higher this year, it didn’t stop shoppers from seeking aspirational vehicles, and while purchases skewed more practical, the emphasis wasn’t only on economical options, which could indicate prices aren’t as much of a deterrent as they were last year.”

The year of the truck

AutoTrader noted that 2023 has been a notable year for trucks in Canada. Despite the economic pressure and high gas prices in the previous year, Canadian consumers are increasingly interested in trucks.

For the first time since 2019, two trucks made it to the Top 10 Most Searched Vehicles List, indicating a shift towards a “bigger is better” mentality. With a 51% year-over-year increase in inventory, trucks are enjoying a surge in popularity this year.

Resilience of Canadian car buyers

Despite the hike in vehicle prices, Canadian consumers have shown remarkable resilience in their shopping behaviour. AutoTrader’s study revealed that 58% of Canadians positively rate their current financial situation and 45% believe their personal finances will improve.

This optimism is reflected in a 5% increase in visits to the AutoTrader marketplace compared to last year.

Growing new vehicle inventory

The inventory of new vehicles on AutoTrader has grown to 41% in 2023, up from 30% in 2022. This increase, resulting from normalized manufacturing levels, has started to balance out the interest in used vehicles.

Consequently, used vehicle prices have begun to decline since July, following an initial drop in inventory in the first quarter.

Electric vehicles interest dips but options grow

Following a spike in interest in 2022 due to high gas prices, EV purchase intentions have declined in 2023. Only 56% of non-EV owners are open to purchasing an EV, a decrease from 68% the previous year. Macroeconomic factors like vehicle prices, interest rates, and inflation are cited as primary concerns.

This comes as S&P Global Mobility reported that one out of every 10 new vehicles registered in Canada was battery-electric. Another 3 per cent were plug-in hybrids.

The EV inventory has seen a 146% increase in average weekly inventory year-over-year, with new models like the Kia EV9 and Volvo EX30 entering the market.

The post AutoTrader’s top industry trends appeared first on Auto Service World.

Teslas on display at the 2023 Canadian International Auto Show

A recent report found that the Tesla Model 3 is the top choice for car shoppers when looking for an electric vehicle for under $50,000 (all prices in U.S. dollars).

This ranking was put together by Cash for Clunkers and based on data from Google Keyword Planner data and looked at search popularity. It considered factors like electric range, engine power and functionality, focusing on cars priced under $50,000.

Topping the list is the Tesla Model 3 with over 23 million searches, priced at $42,000. Despite not leading in electric range or engine power, the Model 3’s popularity stems from the brand’s strong market reputation.

The Hyundai Ioniq 5 took second spot with over three million searches. Priced at $41,450, its popularity is credited to its impressive electric range and quick charging capabilities.

In third was the Volvo EX30, attracting about 2.7 million searches. This model, priced at about $34,950, stands out for its powerful engine.

The fourth position was held by the Volkswagen ID.4, with more than 2.5 million searches and a price tag of $38,995. Despite ranking lower in engine power and electric range, it’s favoured for its optimal charging time and high safety score.

The Chevrolet Bolt EV, with nearly 2.5 million searches, was fifth on the list. As the most affordable option at $26,500, it appeals to budget-conscious buyers, despite less advanced features.

The Kia EV6, with more than two million searches and a price of $42,600, ranked sixth. It boasts an electric range close to Tesla and a powerful engine but is priced higher than some competitors.

Seventh was the Ford Mustang Mach-E, with around two million searches and a price of $42,995. It leads in engine power but ranks lower, possibly due to Ford’s emerging status in the EV market and its higher price.

The Kia Niro EV, eighth on the list, garnered about 1.8 million searches. Priced at $39,550, it ranked lower in both electric range and engine power and has the longest full charging time.

The Hyundai Ioniq 6, not yet on sale but set for release this year, was ninth with 1.8 million searches. Priced at $38,615, it has the best electric range on the list, even surpassing Tesla.

Rounding out the top ten was the Hyundai Kona Electric, with more than one million searches. Priced at $35,000, it doesn’t rank as high in engine power and electric range.

The post The budget friendly EVs consumers are looking for appeared first on Auto Service World.

Image credit: Depositphotos.com

Consumer behaviour around what they expect from their local automotive repair shop has changed. Your shop needs to keep pace, urged an industry expert.

Customers are looking for ease of doing business with you online. Ben Johnson, director of product management at Mitchell 1, cited a survey from MEMA Aftermarket Suppliers that showed 95 per cent of customers research online before they buy anything. And when it comes to what they want most from their local automotive repair shop, two-thirds said it’s the ability to book an appointment online.

That’s not a surprise to him. Johnson told attendees of AAPEX 2023 that he does the same when making restaurant reservations or booking medical appointments.

“The younger drivers, the younger customers — everybody has a phone now. Nobody uses that as a phone,” he said. “It’s messaging and social and this and that. Phone calls are actually down. So this is the way these folks like to be communicated with.”

Johnson grew up in a time when people found his shop through the Yellow Pages. They called him and they had a face-to-face conversation. Both sides valued that. Young people don’t care for that as much anymore.

“But what hasn’t changed is the expectation that when a car is brought into your shop that they’re either going to pick it up the same day they dropped it off or, at worse, the next day,” Johnson said during his presentation, How Shops Build Trust and Transparency with their Customers. “That’s a promise that the aftermarket has kept for years of years. It’s amazing, actually, when you think of the supply chain issues that can happen that we’ve been able to do that.”

And if 95 per cent of people are searching online, they’ll eventually click on a website. Will yours be appealing to potential customers?

“And so we want to make sure that our website is as clean and spruced up as the front of your shop when that customer finally drives up there,” Johnson pointed out.

“Think about the guy or gal that’s never seen your shop and make sure there’s information up there that will help them make the right decision about picking your shop.

That means if you have an online booking tool, that your calendar is refreshed as slots are booked. It would be frustrating and drive away customers if they make a booking only to be told that time slot wasn’t actually available. Or they get a phone call a few minutes later from the shop’s service advisor saying their team can’t actually accommodate the customer at that time.

“It’s kind of a first negative impression,” Johnson said. “Communication is key. Take care of them. Let them have their online appointments. That’s how they want to deal with you. If you don’t do these things, it’s giving you a much bigger chance of them looking around until they find somebody that does.”

The post How to keep up with consumer change appeared first on Auto Service World.