Depending on which dealer you talk to and the brand or multiple brands they retail, there is reason for optimism or concern for vehicle sales in Canada this year, according to some people interviewed by Canadian auto dealer.
While new car sales improved in 2024 by 15 per cent from 2023, profit margins dropped — in some cases significantly, based on the brand. But David McQuilkin, Dealer Principal and General Manager of Milton Ford Lincoln Inc. in Milton, had a great year with his store and is buoyant about his brand and the business as a whole.
“Although the industry sales are up, our profit margins are down, so the consumers are the winners here,” said McQuilkin. “It’s a great time for consumers to buy a car, coupled with falling interest rates. That creates more disposable income and people like that new car smell.”
“I’m very, very optimistic for 2025. Ford as an industry, Canadian-wide, is up year-over-year. The industry is up year-over-year. There’s only a couple of manufacturers that still have tight inventory, but everyone else is back to normal levels.”
McQuilkin said dealers overall are “back to the barking dogs and balloons,” insofar as making it more attractive for consumers to purchase new vehicles.
“We have a program (at our store) where you buy a vehicle and you get a three-day trip to Vegas. We wouldn’t have done that through COVID. We didn’t have any inventory,” he said.
Devin Kaulback, General Manager of Subaru of Niagara, had a banner year in 2024, selling the most vehicles in the history of the dealership, which opened in 2012. He said he had concerns heading into 2024 about allocation and the high interest rates, but it all worked out with the store selling more than 800 new car sales — besting the previous mark of 702 set in 2021. It also sold 350 used vehicles.
“I know 2025 will be the same trajectory, surpassing 2024 for sure,” said Kaulback, who credited Subaru Canada for being a great partner in 2024 and setting up the dealership to succeed.
“We feel very supported by them,” said Kaulback. “They’ve been listening to what we’ve been asking as dealers, in terms of support. We have a very plentiful and strong lease portfolio and the other aspect of it is being established for 12 years here in Niagara.”
“There are many Subaru stores that showed some success over the last two years when inventory was scarce, but there were a lot of stores that went backwards as well. With the level of care we provide our customers at our store and how much attention we give them, they’ve never forgotten that. I think that has been a big reason why we’ve been able to keep the consistency of success every single month.”
He added that they have a great loyal customer base to work with and that wants to work with them. “If you set the proper expectations and you have a process of leading and guiding the customer through the journey to find the right vehicle —you do what you say — there’s an opportunity to still maintain numbers where they have been over the last couple years.”
Carson Grant, Managing Partner and Dealer Principal of Comox Valley Dodge in B.C., said he is “more than excited” about 2025 after a drop in profits in 2024, some of it related to Stellantis, which underwent a change in leadership in December.
“There’s peaks and valleys within this business,” said Grant. “You need to grind through the valleys and ride out the peaks. We’ve already seen an uptick and buy-in from Stellantis on rebates and interest rates. I truly believe it’s going to be a substantially better year than 2024. I think as Stellantis dealers we learned a lot with regard to inventory control, budgeting properly, and staff training. Stellantis had a tougher year than years prior, but we are ready for a great year and I know Stellantis is there to support us in making that possible.”
“There’s a lot of stores out there that have lost market share and profits. But I believe tough times are actually good if you learn from those lessons. That’s what I’m really pushing for. Stay positive and focus on the things we can control, which is our attitude, work ethic, and just being good people and maintaining good business practices and being ethically correct.”
Vaughn Wyant, President and CEO of the Wyant Group, which has stores representing various brands in Saskatchewan, Alberta, and B.C., is concerned about the industry for 2025. He said the improved sales figures of the last two years do not fully tell the story of the industry overall.
“In our business we would always look for one number to determine whether we’re getting better or not, and that number is net profit,” said Wyant. “I think for the manufacturers and the dealers that number is way off. That’s how we can tell if business is better. We can also tell how business is by the margins that we get. When business is slow, guess what happens, dealers drop margins to move inventory because interest rates are high. It’s a no-win situation.”
“Manufacturers have to push products because they have to keep their plants going. Dealers are paying higher interest rates and they have more product than they need, so they start to give it away. That’s what we are seeing now. Even if we sold the same number of cars, I can tell you the gross per vehicle is down. We have to keep buying and moving, and the manufacturers all have their programs and targets. There’s a lot at stake for not making a target.”
He said every business has these 10-year cycles and thought 2024 was a bit low, but expects 2025 will be lower — especially with the political upheaval in Canada.
“People need hope,” said Wyant. “I know the premium luxury business is really tough now. That slowed down a lot. It’s about affordability on every level. People are going to keep their car a little bit longer… (and) when people start realizing we’re going to have an election they will tend to wait, feeling the next government will make things so much better, so much faster, and they are not going to risk making a major purchase prior to that happening.”
“I don’t see the first quarter of 2025 being particularly awesome. I look at the numbers from the different manufacturers. With some exceptions, they are not awesome. They are struggling to stay within 10-15 per cent of the year before. I don’t think that’s good. You can’t help but be optimistic we’re going to break the cycle eventually, (though) frankly (I) don’t see it that much right now.”
