Canadian auto sales are expected to decrease to 1.94 million units in 2017, coming off four consecutive record years. Despite the beginning of a sales recovery in the resource-rich provinces, gains in Alberta and Saskatchewan are expected to be more than offset by declines in Ontario, Quebec, and Atlantic Canada.
“Recent price increases for new cars and light trucks have started to dampen affordability, and will likely outweigh the positive impact of stronger economic growth in Canada this year,” said Carlos Gomes, senior economist and auto industry specialist at Scotiabank. “Although vehicle sales in the commodity-producing provinces are finally starting to recover from the sharp double-digit declines of recent years, activity in the rest of the country is likely to trend lower.”
The Scotiabank Global Auto Report observed:
- Alberta had a sharp downturn in the auto market, which included a 30% peak-to-trough slump, but has now come to an end. Economic activity and vehicle purchases are bottoming in Saskatchewan with late-2016 sales largely in line with a year ago.
- Ontario will likely edge down to 796,000 units this year from a peak 802,000 units in 2016.
- Quebec sales are likely to edge down, but purchases are expected to remain above 460,000 units for the second consecutive year, supported by stronger exports and the highest leasing penetration in Canada.
- B.C. has been the second strongest auto market in Canada in the latest expansion and is expected that sales will remain unchanged this year as economic activity remains solid outside of a less-hot Vancouver housing market.
- Atlantic Canada vehicle purchases were flat last year at 149,000 units, but are expected to decline to 135,000 in 2017.
Read the full report online.