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December 29, 2023

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The Year That Was: 2023 Canadian Automotive Trends

With the end of 2023 fast approaching there’s no better time to reflect on the top trends in Canadian automotive and how we expect things to shape up heading into the new year based on data observed through the AutoTrader.ca marketplace as well as leading Canadian automotive market research firms. Let’s deep dive our observations and insights from 2023 and unpack what it means heading into 2024!

Inventory Supply on the Mend

Examining new and used inventory movement throughout the year, new car supply has continued to increase since August 2022, reaching comparable levels from the halfway mark of 2021.¹Early modelling also suggests a modest increase in new vehicle inventory in the coming years. Consequently, we expect to see a rise in used inventory in 2024, spurred by a lift in new car sales and a slight drop in demand for used vehicles. However, from 2025 onward, the impact of reduced new car sales between 2020 and 2022, a result of fewer lease returns, could tighten used car inventory supply and potentially impact prices, particularly if compounded by strong demand and an overall improvement to macroeconomic factors.

Purchase Intent Remains High & Market Growth is Projected to Persist in 2024

Since 2020 our Canadian car shopper sentiment study indicates sustained intent to purchase a vehicle in the next six months, driven by interest in new cars following an improvement to inventory supply.²The overall appeal of private vehicle ownership remains high, with 83% of commuters relying on private vehicles as of May 2023, influenced by a continued aversion to public transportation and ride-sharing services.³ Despite a slight recent slowdown in used car sales, observed in early August, the market overall is projected to grow in 2024.

Electric Vehicle (EV) Market Remains Resilient Despite a Temporary Dip in Consideration

Our annual Electric Vehicle (EV) research shows 12-point dip in consideration over twelve months, from 68% in March of 2022 to 56% one year later.⁴ Objectively speaking, unique circumstances influenced our 2022 EV study, as it coincided with the conflict between Ukraine and Russia and a spike in gas prices, resulting in a temporary surge in EV demand. While EV sales are increasing, supply outpaces demand, with a significant 800% year-over-year increase in new Battery Electric Vehicle (BEV) inventory.⁴

Transforming Canadian Car Shopper Preferences

Research and data of Canadian car shopper tendencies and trends underlines the emergence of a preference for transactional features via access to online shopping tools and services to complete more of the car buying journey online.² Growing numbers of consumers are signalling that traditional processes are in need of a re-alignment to cater to differences in the way people shop for cars. To help dealerships support consumers seeking even more online car shopping options, we brought AutoTrader.ca Deal Builder to market, which provides shoppers the flexibility to build a deal directly from Vehicle Detail Pages (VDPs), resulting in high intent, conversion-ready leads for dealer partners.

Prices Remain Steady with Significant Corrections Unlikely

Following a continuous two-year climb, new car prices saw a slight decline in October of this year, signalling a potential peak due to oversupply.¹ Despite pent-up demand for new cars and the inflow of more expensive electric vehicles, significant corrections in pricing remain unlikely. Conversely, used prices started decreasing in July, prompted by new car sales taking off, the subsequent lift to in trade-ins, and a modest drop in demand for pre-owned vehicles. Though the used car market may experience short-term fluctuations based on a supply and demand imbalance, substantial price corrections are not anticipated.

While the Canadian automotive landscape is experiencing shifts in consumer demand and fluidity to inventory supply, the overall outlook for the upcoming year remains a positive one. With sustained demand for private vehicle ownership and stout near term vehicle purchase intent, the market is expected to show positive year-over-year growth in 2024.

Watch our latest AutoTrader Carology Talks with Ian MacDonald, Chief Marketing Officer at AutoTrader, and Baris Akyurek, Vice President of Insights and Intelligence, to hear more about the top trends in Canadian automotive across 2023 as well as an outlook for the forthcoming year!

Source: (1) AutoTrader Price Index Report, 2023. (2) Car Shopper Perceptions & Intentions Research Study, DIG Insights, May 2023, (n=305). (3) Statistics Canada, May 2023. (4) Electric Vehicle Research, March 2023, (n=1,332), n=305