New Canadian light vehicle sales were split at the segment level for the first quarter of 2024, as DesRosiers Automotive Consultants observed an increase of 18.7% for the mass market category, and a decrease of 7.3% for luxury.
In its latest update, DAC noted that overall new light vehicle sales for Q1 jumped 15.3% among reporting OEMs, but that there has been an “extreme divergence” in sales patterns. Given this situation, they also said it is unsurprising that two of the three worst performing segments for Q1 within the luxury category were luxury cars (down 29.1%) and compact luxury cars (down 19.7%).
The other extreme was the increase in sales that subcompact SUVs managed, which was 58.2% thanks to volume gains by the Chevy Trax, Nissan Qashqai, and Hyundai Kona (among others). As DAC put it: “We love a ‘hot hatch’ … so we are happy to note that sports cars similarly saw a 48.3% increase led by a significant increase for the evergreen VW Golf R.”
Overall, DAC said light trucks continued to gain ground in Q1 when compared to passenger cars, with light truck sales up 348,000 units or 16.2% — reaching 86.8% of the market. Passenger cars, on the other hand, managed an increase of 10.0% compared to Q1 2023 — selling up to 53,000 units.
Putting aside the clear divergence between mainstream and luxury, DAC highlighted its increasing concerns about the overall market.
“There are a number of warning signs appearing even in the mainstream market — incentives are climbing, sub-vented leasing has reappeared, and consumers are increasingly pushing back against the ‘trimflation’ seen in 2022/23,” said Andrew King, Managing Partner at DAC, in a statement.
DAC added that the market seems unstable, but that they will be keeping an eye on it in the coming months “to see if we are approaching an inflexion point in which pent-up demand is overcome by high interest rates, increased vehicle prices, and tepid economic conditions.”
