For the first time this year, and only the second time since December 2013, new-vehicle sales in Canada were lower in May than in the same month a year earlier.
Sales of 194,866 new vehicles were down just 1.6 per cent from the same month a year ago — a minor adjustment that could result from fewer selling days in May this year. There were also the effects of the Alberta wildfire disaster to consider.
That means the turnaround may just be a brief breather in an overheated market and not a signal that the long-running sales growth bubble has burst.
According to David Adams, president of the Global Automakers of Canada, May sales were still 7.8 per cent better than the five-year historical average for the month.
He added, “Consumer confidence remains strong having moved up 7.4 points over last month, which bodes well for the continued tracking towards record sales for 2016.”
Still, while the percentage decline in sales is modest, it comes on the heels of a three-month string of 8.2 per cent average sales increases and the biggest sales month ever in April. In addition, the seasonally adjusted annualized sales rate (SAAR) fell to about 1.85 million units, continuing a four-month trend interrupted only by April’s abnormal performance.
However, that SAAR level is close to the 1.899 million record set in 2015. Current year-to-date sales of 798,089 vehicles remain 5.6 per cent ahead of last year’s record pace.
So, a new record at the end of 2016 is still possible, assuming that the momentum continues, said Dennis DesRosiers of DesRosiers Automotive Consultants. The next couple months will be critical in assessing the likelihood of the string continuing.
As has become the norm, the strength in the market came from truck and utility vehicle sales, which were up 6.6 per cent in May. It was a 12.7 per cent reduction on the passenger car side that drove the overall decline.
Year-to-date, trucks and utilities now command 64.9 per cent of the market — a 5.1 per cent increase from this time last year.
FCA on top for May and YTD
Fiat Chrysler Auto’s sales were up just 0.3 per cent in May, while Ford’s increased by 1.1 per cent. But in overall numbers, FCA’s 31,724 sales surpassed Ford’s 29,374 total.
Ford had claimed the top spot for the past two months but FCA has held the year-to-date lead since January and continue to do so with 124,663 vehicles sold (+3.1 per cent), compared to Ford’s 121,143 (+12.9 per cent).
Ford has gained a full percent in market share to 15.2 per cent, however, while FCA dropped four-tenths to 15.6 per cent. It promises to be an ongoing battle between the two for sales supremacy throughout the year.
Sales for third-place General Motors fell by 16.5 per cent in April, although they’re still up 1.1 per cent year-to-date. GM has lost a half-percent of market share from this time last year, down to 13.1 per cent.
Behind those leaders, Toyota (-0.8 per cent) remained unchallenged in fourth place, gaining a bit on GM but still remains behind.
Honda, in fifth, showed the biggest improvement among mainstream brands in May, with a solid 8.4 per cent sales increase. Behind Honda in ranking order were: Hyundai, (+5.6 per cent), Nissan (+1.6 per cent), Kia (-4.7 per cent), Mazda (+0.2 per cent) and Volkswagen (-10.5 per cent).
Volkswagen was the biggest loser of all in terms of market share, giving up seven-tenths of a percent in share, dropping to a 3.3 per cent share.
The biggest gainers were luxury brands: Volvo (+18.9 per cent), Audi (+14.8 per cent) and Jaguar (+10.1 per cent). At the other end of the spectrum were Smart (-70.7 per cent) and Acura (-25.4 per cent).
[NOTE: Data quoted in this report were sourced from DesRosiers Automotive Consultants, Global Automakers of Canada and individual automakers.]
