Canadian vehicle sales strong in March: Scotiabank

Canadian vehicle sale purchases in March 2017 advanced 7% above a year earlier, setting a monthly record for March.

According to the latest Auto News Flash from Scotiabank, sales exceeded an annualized 2.1 million units in March 2017, lifting year-to-date purchases to an average of 2.07 million – the best three-month performance on record.

“Last month’s surge was driven by double-digit gains for both light trucks and luxury models and highlights that Canadian vehicle demand is running more than 100,000 units above our full-year sales forecast,” Scotiabank said. “While increased incentives helped lift sales at a large automaker 23% above a year ago, six other manufacturers also reported double-digit gains, a development that highlights the broad-based strength across the market. While we expect some moderation from the torrid sales pace of recent months, we will likely have to revise our full-year forecast higher in coming weeks.”

In contrast, passenger vehicle sales in the U.S. were weaker than expected last month, with most automakers reporting sluggish volumes. “We estimate that sales totalled an annualized 16.6 million units in March, well below the 17.2 million unit pace that had been expected and the lowest sales rate of the past year,” Scotiabank said. “Weak business purchases accounted for much of the downturn, as fleet volumes for the Detroit Three slumped 14% below a year earlier. However, sales to households continued to edge higher, rising 1% above a year earlier as Americans continue to replace their ageing vehicles.”

Scotiabank expects purchases to rebound during the spring selling season, especially since most indicators point to an improving economic backdrop, including a solid labour market, accelerating wage gains and the highest consumer confidence since 2000.