Downward Trend Of Used Car Sales In Canada To Continue Until 2009

Toronto, Canada (AHN) - Prices of used cars across North America will continue to decelerate until early 2009, according to the latest Global Auto report issued by Scotia Economics Tuesday.

Carlos Gomes, senior economist and auto industry specialist of Scotiabank, in a press statement, explained, "Used car prices have been declining across North America since late 2006, but the weakness accelerated in early 2008 alongside deteriorating economic conditions - especially in the United States... We expect used car prices to continue to soften through early 2009, pressured by rising unemployment in both the United States and Canada."

According to the Scotiabank Used Car Price Index, the downward trend started in Canada by mid-2006 resulting from the rise in import of used cars from the U.S. sold at prices lower than local secondhand autos. The economic slump in the U.S. has prompted the sale of cars by Americans, affecting the Canadian secondhand car market, especially in areas near the Canadian-U.S. border.

Even sales of new cars are expected to further weaken across North America, which contrasts with rosy auto sales projections for booming Asian tiger economies like China. According to car executives at the recent Beijing Auto Show quoted by AP, sales of some models grew by 100 percent for the first quarter of 2008.

Toyota Motor executive Yuzo Ushimaya told the AP he expects the firm to sell 700,000 cars this year, up by 40 percent from 2007 sales. In 2007, overall auto sales in China hit 5.5 million units.