After the huge 8.9 per cent increase in April, May new vehicle sales gains in Canada were softer. Nevertheless a 5.3 per cent increase is still respectable and is helping driving volumes to near record numbers for some manufacturers, according to an analysis of sales figures released by DesRosiers Automotive Consultants Inc. Total deliveries for new cars and light trucks in May amounted to 185,040 units, of which 84,006 sales or 44.5 per cent were passenger cars and 98,993 or 55.5 per cent were pickups, crossovers and SUVs. The domestic trio of Ford, Chrysler and General Motors continue to lead the way in terms of volume with Chrysler establishing itself comfortably in the number two spot. Truck sales have also proven to be solid so far this year — demand saw a gain of 7.9 per cent for the month, while year-to-date sales have seen a 5.7 per cent increase, compared with 2012.
Among Asian manufacturers, the volume players, Toyota, Hyundai and Honda saw a good increase in sales compared with a year earlier. For Toyota and Honda, this reflects their strengthening performance in 2013, as the last vestiges of supplier problems fade away and a raft of fresh and anticipated new models, along with attractive incentives help bring buyers into showrooms. Honda, which sold 14,680 vehicles in May witnessed a gain of 22.2 per cent over 2012, while its luxury brand, Acura, was one of the few in that segment to actually post significant increases over a year earlier (up 22.6 per cent from May 2012).
For many luxury and imported brands, sales were either down or only slightly above 2012 totals, perhaps reflecting the economic mood in general. Although auto sales have shown remarkable resilience in recent years, rising household debt among Canadians (which now represents approximately 165 per cent of income) continues to be a concern and could potentially impact vehicle sales down the road.
Additionally, economic projections are showing Canada’s growth rate will likely be lower through 2014 than previously predicted. The Organisation for Economic Cooperation and Development (OECD), has downgraded its forecast for Canada, putting growth at 1.4 per cent for the year (compared with a 1.8 per cent rise projected back in November). For 2014, the OECD has economic growth pegged at 2.3 per cent, placing Canada behind its largest trading partner, the U.S. whose economy is expected to grow at a rate of 2.8 per cent.
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