Canadian vehicle sales up in January: Scotiabank

Canadian vehicle sales in January set a new record, climbing above an annualized 2 million units, but the longer term prognosis isn’t so rosy.

“Despite a stronger-than-expected performance in the opening month of 2017, we still anticipate lower annual sales, as vehicle affordability begins to erode alongside some slowing in real income gains,” a new report from Scotiabank said.

In its latest Auto News Flash, Scotiabank said that improving sales in January were broad-based, with volumes advancing for both domestic and imported brands and lifting overall purchases above the 2016 full-year record of 1.95 million units.

“Light trucks continued to lead the way, with purchases of imported CUVs posting another double-digit advance,” Scotiabank’s report said. “In contrast, light truck volumes were mixed among North American automakers. Two manufacturers reported sales gains, but the third automaker posted weak results for both pickup trucks and crossover utility vehicles.”

In the U.S., meanwhile, purchases downshifted last month from the record-setting pace of 2016. “We estimate that U.S. car and light truck sales totalled an annualized 17.5 million units in January, down from an average of 18.0 million in the final three months of last year,” Scotiabank said. “The moderation was driven by sharply lower fleet volumes, which declined five per cent below a year earlier for the Detroit automakers.”

Unlike in Canada, Scotiabank predicts vehicle sales in American will remain strong going forward. “The industry expects sales to pick up in coming months and despite high inventories for some models, is still planning to increase North American assemblies three per cent year-over-year in the opening months of 2017. Light trucks are projected to lead the way, with production scheduled to jump six per cent year-over-year.”