ALG, the official residual-value arm of global research firm J.D. Power, published the results of its 2022 Canada Residual Value Awards this week. General Motors Canada performed well in the study, with the Detroit-based automaker’s Canadian subsidiary surpassing most of its rivals for the most segment-level awards at six.
J.D. Power says that “numerous variables affect the actual residual value of a vehicle over a multi-year lease term,” including mileage, quality/reliability, options and feature sets and the current macroeconomic environment. The research firm says automakers need to take these variables into account when forecasting residual values as this will leave them better equipped to maximize profitability with off-lease vehicle sales and repossessions.
GM netted $2 billion from used vehicle sales in 2021, according to its recently published earnings report – an impressive performance that was in part enabled by strong demand for used vehicles due to the semiconductor chip shortage. The automaker will also launch its own used car sales service this year called CarBravo, which will sell used examples of both GM vehicles and vehicles from other automakers. This effort will make residual values extra important to GM, as it will likely stand to gain even more from used vehicle sales once the consumer-facing version of CarBravo is up and running this spring.
ALG awarded a total of 16 different brands across 29 vehicle segments in this year’s edition of its annual used vehicle valuation study. The 2022 evaluation process accounted for 274 different vehicle model lines, which were analyzed on a variety of factors including used market performance, brand outlook and overall product competitiveness.