Industry costs on the rise

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.”