Canadian vehicle purchases dropped in September: Scotiabank
But auto sales in the U.S. jumped to an annualised level of more than 17 million units in September, Scotiabank said, beating expectations.
Canadian vehicle purchases dropped by 7.4 per cent year-over-year (y/y) in September for a seventh consecutive month of year-on-year declines and the market’s steepest y/y contraction since 2009, a new report from Scotiabank says.
According to Scotiabank’s latest Auto News Flash, at an annualised pace of 1.97 million units sold on average each month during Q3 2018, quarterly sales averaged under 2.0 million units on a seasonally-adjusted annualised basis for the first time since Q4 2016. “A decline in business and consumer confidence between August and September, as reflected in survey readings, appears to be behind the drop in sales during the month,” the report said. “However, given the absence of other economic indicators for the month, it is still too early to tell what caused Canadians to hit pause on vehicle purchases. If it were a transitory issue, sales should bounce back in October on the basis of our broader macroeconomic forecast.”
In the U.S., meanwhile, auto sales jumped to an annualised level of 17.36 million units in September supported by dealer inventory clear-outs of 2018 models, beating expectations for 17.0 million units sold.
“Last month’s print follows two consecutive months of sub-17 million vehicle deliveries for an average of 16.9 million vehicle purchases in the third quarter,” Scotiabank said. “This marks the lowest quarterly performance since Q2 2017, and a decline from average sales levels of 17.1 million and 17.2 million units in the first and second quarters of 2018, respectively.”
Scotiabank continues to expect U.S. vehicle sales to continue on a downward trajectory through year-end for an annual total of just over 17 million units sold in 2018. “Purchases contracted heavily by 5.9 per cent y/y from a high base last September that was generated by vehicle replacement demand following Hurricane Harvey’s landfall in the U.S. Gulf Coast,” the report said. “The Detroit Three automakers saw a combined drop of 7.5 per cent y/y, although Fiat-Chrysler’s (FCA) unit sales exceeded Ford’s for the first time since January 2016 while GM remains the king of Motor City.”
Across all automakers, truck sales in the U.S. rose by 6.2 per cent y/y compared to a 17.5 per cent decline in car purchases, Scotiabank said.