The Canadian aftermarket between the climate hammer and the American anvil

The evil that is eating away at Canadian workshops is the used car exodus! With a relatively young fleet (10.5 years old), Canada should be a repairer's paradise. Except that the prices generally witnessed south of the border act like a giant magnet. Vehicles between 5 and 8 years old, the core target of independent repairers, are crossing the border to be resold in US dollars. The result? Canadian garages are seeing their most profitable customers evaporate, leaving a difficult-to-fill gap between new vehicles under warranty and end-of-life vehicles. “Canada is a small market in terms of volume, but strategically, it sits between Europe and the United States in terms of behaviour. Except that this vehicle drain is a hot topic for the Canadian aftermarket, as it eliminates the most profitable age group for independent repairers”, says Alexander Gruzdev (Gruzdev Analyze). And that's not to mention extreme climatic constraints and a very uneven geography: dense urban corridors with a lot of dealerships and chains, and vast regions where independent garages are the only real option.
Next disappointment: what was billed as the consecration of battery technology finished with a flop. In 2025, the Canadian electric vehicle market saw a dramatic 30% drop in registrations. Why such a sharp slowdown? At -30°C, the fear of breaking down is no longer a concept, it is a daily reality that discourages buyers, who prefer to return to the good old combustion engine, which is more reassuring for travelling across the country's vast expanses. “Canada is discovering the second phase of electrification: after the early adopters and generous incentives, the mass market is more cautious, especially in a cold and sparsely populated country. The double whammy of high prices and a disappointing daily experience is enough to cause this 30% correction in registrations.”

In Canada, the parts distribution market is dominated by a few ultra-powerful networks that model themselves on the American “Big Four”. “This market resembles a condensed version of the American market: a few powerful distribution networks, a long tail of independent retailers and a secondary market that has to compete not only with dealerships, but also with the gravitational pull of the American market just across the border”, notes Alexander Gruzdev. For small independent retailers, survival therefore depends on hyper-proximity, especially in rural areas where they remain the only bulwark against a service desert. But competition is fierce between ambitious dealers and the gravitational pull of US prices, and margins are scarce.
Canada therefore remains a market for specialists. While the extreme climate guarantees a constant flow of suspension and battery replacements, tomorrow's profitability will depend on repairers' ability to retain their customers in the face of American competition.

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