Canadian auto sales down in March: Scotiabank

Canadian auto purchases fell by 2.5% year-over-year (y/y) in March for a thirteenth straight month of year-on-year declines off near-record-high sales levels in early-2018, a new report from Scotiabank said.

On a month-on-month basis, sales rose for the third consecutive time with a 0.9% gain to 1.97 million units sold on a seasonally adjusted annualised rate (saar) basis, Scotiabank’s latest Auto News Flash said.

“Following a sharp dip in sales in the final quarter of 2018, vehicle deliveries in Canada have rebounded in recent months,” the report said. “However, purchases should settle on a more stable downward trajectory toward a medium-term sales total of around 1.90 million units sold off 2017’s record of 2.04 million units as the Canadian economy aligns itself to its long-run potential. We forecast that auto sales in Canada will fall to 1.93 million units delivered in 2019.”

In the U.S., meanwhile, auto sales rose by 5.9% m/m to 17.5 million saar units sold, handily beating the median analyst’s forecast of 16.8 million units sold. Despite the month-on-month climb, vehicle purchases fell by 2.2% y/y in March for a third straight month of year-on-year declines, Scotiabank said.

“Sales for the first quarter contracted by 3.4% quarter-over-quarter to a still-strong three-month average of 16.90 million saar units – their softest quarterly performance since Q2-2017 – owing to temporary factors, such as particularly adverse weather and the federal government shutdown, as well as the more persistent effect of rising prices on new vehicles and reduced dealer incentives,” Scotiabank said. “While the U.S. economic expansion is set to slow in 2019 and 2020, solid employment growth and sturdy household finances should continue to support strong, albeit plateauing, auto sales of about 16.7 million units in each year.”