New light vehicle sales soar in Canada
A thriving national economy has pushed new car sales to record levels in Canada this year, with both fleet and retail registrations rising significantly.
Light vehicle sales in September set a record level for the month, at 186,837, up 7.7% on the same month in 2016, and 15.6% better than the five-year historical average. Year-to-date sales now total 1,591,684 units, and if this momentum continues, Canada is on course for full year figures in excess of 2million units.
“It was not that many years ago when 1.59 million in sales represented a good year for total annual sales, let alone sales for sales through the end of the third quarter,” said David Adams, president, Global Automakers of Canada. “Consumer demand and the market continue to impress.”
Canada’s annualised economic growth achieved a robust 4.5% in the second quarter, and although the economy slowed a little in the third quarter, business and private consumers are showing a keen appetite for new vehicles.
Truck sales boom
September marked a particularly strong market for truck sales, which rose by 20% to account for 69% of the light vehicle market.
“Truck sales indicate increased business investment, specifically in resource rich Western Canada where trucks make up a significant portion of corporate fleets,” said Peter Nogalo, marketing manager of fleet management company ARI Canada.
ARI expects fleet sales to continue to be robust for the remainder of 2017 and into 2018, barring a significant decrease of business spending or economic growth. Long-term low oil prices have held back fleet in Western Canada, but signs of renewed spending are starting to appear, and ARI reports stronger sales in 2017 than last year.
“The most significant trend, both in fleet and retail new vehicle sales in Canada, is the continued shift away from passenger cars to cross-over vehicles and small SUV’s. New fleet registrations in the car segment actually fell in 2016 by two percent, which was more than offset by an increase in light truck fleet sales of 12%,” said Nogalo.
Ford was the best-selling manufacturer, and the blue oval’s F-series truck was the best-selling vehicle in September.
Fleets are having to contend with higher borrowing costs, however, after the central bank of Canada increased interest rates twice in response to strong GDP growth of 3% and the Canadian dollar gaining 10 cents in its exchange rate with the US greenback. This has driven up lending rates and lease costs for fleets.