The numbers for the week ending February 7th weren't pretty. The Canadian used wholesale market dropped 0.71% — the biggest single-week fall in quite a while, and well above the pre-pandemic average of around 0.28% for this time of year. Across the board, this was a week where market anxiety showed up in a real and measurable way.
Where the Damage Was Concentrated
Cars fell 0.67% and trucks dropped 0.75%. Within those top-line numbers, the pain was concentrated in specific segments that point to where buyer appetite is weakest.
On the car side: sporty cars got hit hardest, down 1.41%, followed by near-luxury cars at 1.27% and sub-compact cars at 1.22%. These aren't distress categories — they're segments where buyers have options and are taking their time. Sporty cars in particular are discretionary purchases, and when people are uncertain about tariffs and the economy, discretionary purchases get deferred.
The truck side was even more striking. Compact vans dropped a staggering 1.90% — the single largest segment move of the week. Compact crossovers fell 1.51%. These are segments that should be holding up well given real utility demand, which makes these declines notable. The compact crossover space in particular is crowded with near-identical product at overlapping price points, and buyers aren't rewarding anything mediocre right now.
The one category that managed to resist the tide: premium sporty cars gained 0.32%. Buyers in that niche aren't as price-sensitive, and they typically transact regardless of macro noise. Useful countertrend, even if it's a small slice of total volume.
44.4% Auction Conversion — What That Number Actually Means
Auction conversion rates came in at 44.4% on average. That's low. Context: healthy used car auction conversion typically runs in the mid-50% to 60%+ range. At 44.4%, more than half of the vehicles offered at block didn't sell.
This confirms that buyers are being very selective — and that sellers still haven't adjusted their floor price expectations to match where the market is actually trading. About 91% of market segments saw average value swings of more than $100 per unit during the week. That breadth — almost every segment moving by a material amount — is what makes this week unusual.
For dealers at auction, 44.4% conversion means you have leverage on what does come to market. If you're patient and disciplined about what you're willing to pay, there will be vehicles available. Don't overpay chasing units in a low-conversion environment — you're not competing against a full room of aggressive buyers.
The Government EV Program That Actually Matters for Dealers
PM Carney rolled out the Electric Vehicle Affordability Plan this week: $5,000 for EVs and $2,500 for plug-in hybrids under $50,000. Importantly, Canadian-built models are eligible without any price cap. The incentive also shrinks annually through 2030 — so there's a clock ticking on the full benefit.
For dealers, two things to note. First: if you're selling new or used Canadian-built EVs, the no-price-cap exemption is a real pitch for certain vehicles that sit above the $50K threshold. Second: the annual reduction means buyers who are thinking about a new EV have a financial reason to act sooner rather than later. That's sales ammunition.
January New Car Sales: Resilience Amid the Noise
In contrast to the wholesale softness, January new car sales came in stronger than expected at roughly 114,000 vehicles — only about 3% below January 2025, despite significant tariff-related anxiety. People still need cars. When the deals are reasonable and the payment works, they buy. The resilience in new car sales is actually a mild positive signal for the broader market — it suggests underlying demand hasn't evaporated.
Industry Moves Reshaping the Market
Toyota announced a leadership change, with CFO Kenta Kon replacing CEO Koji Sato starting April 1st — a steady transition at the world's largest automaker. More dramatically, Stellantis recorded a $26.5 billion USD write-down related to its scrapped EV plans and its stock dropped 30% as a result. That's a significant number for a company that includes Jeep, Ram, Chrysler, and Dodge. The ripple effects on product planning and available new inventory in Canada are worth watching.
Ford is reportedly in conversations with both Xiaomi and BYD about potential joint ventures. If that materializes — which isn't a given — it would be one of the most consequential partnerships in the auto industry's recent history. And Nissan is pulling back from full EVs while leaning into plug-in hybrids and extended-range options. After years of making big EV promises, the market is forcing a more pragmatic path.
The Bottom Line for Dealers
A 0.71% weekly drop with 44.4% conversion and 91% of segments moving by over $100/unit is a meaningful data point. It doesn't mean the market is broken — January new car sales were resilient and the macros haven't fundamentally changed. But it does mean cost-to-market targets from three months ago are out of date, and deals struck at last season's floor prices are likely underwater.
The dealers who do best in this environment are the ones watching actual current market data — not last month's book values. The spread between what something costs and what it retails for is the whole game. Right now, that spread is getting squeezed, and staying current is how you protect it.