TORONTO, ONTARIO--(Marketwire - March 14, 2012) - Canadian auto sales rose at the fastest pace in more than 15 years in January; and while there will likely be a dip in the short term, overall the industry is headed in the right direction, according to BMO Economics. Today, Statistics Canada reported that the number of new motor vehicles sold in January rose 15.4 per cent to 153,623 units.
"January's growth was largely the result of inventories becoming available after the auto-sector supply-chain was disrupted last year," said Robert Kavcic, Economist, BMO Capital Markets. "Sales rose across the country, with Ontario and Quebec seeing the biggest increases."
While Mr. Kavcic noted that preliminary data for February indicates some softening, BMO Economics expects overall sales for 2012 to be higher. Sales should total about 14.3 million units in the U.S. and 1.6 million in Canada. This compares with 12.8 million and 1.59 million, respectively, in 2011.
Several factors are expected to contribute to the rebound in the North American auto sector. Maryann Keller, President of Maryann Keller and Associates, noted that some ideal conditions are encouraging people to buy cars. Vehicle prices have generally increased by only single digits, employment has improved and interest rates have been very low, meaning that car loan rates have also improved affordability. "Vehicle affordability is improving, as lenders are proving to be more likely to provide credit across all credit tiers," said Ms. Keller.
The dealer landscape in Canada is continuing to evolve. There were approximately 3,500 dealerships nationwide last year, a number that reflects the stability of retail business within Canada.
"What we're noticing is that dealers are contributing to the experience of the consumer through significant investments in the form of new facilities, upgrades to showrooms and technology, as well as staff training," said Robert Sadokierski, Vice President, Dealership Finance, BMO Bank of Montreal.
New Motor Vehicle Sales - January
- Passenger car sales rose 23.9 per cent to 71,539 units, mainly reflecting higher sales of lower-cost vehicles. North American-built passenger cars led the growth, rising 28.5 per cent. Sales of overseas-built passenger cars (+16.8 per cent) rose for a fifth consecutive month.
- Sales of trucks (which include minivans, sport-utility vehicles, light and heavy trucks, vans and buses) increased 8.8 per cent in January, offsetting declines in November and December.
- Ontario (+23.7 per cent) reported the largest increase in the number of new motor vehicles sold-the fifth increase in six months.
- Sales of new motor vehicles in Quebec (+9.8 per cent) grew for the fifth consecutive month.
- Among the Western provinces, Alberta (+16.3 per cent) registered the largest increase in unit sales. January's gain more than offset declines in November and December.
- The largest increase in units sold among the Atlantic provinces was in Nova Scotia (+11.0 per cent).
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.