Canadian vehicle purchases softened in July: Scotiabank
U.S. vehicle sales climbed to the highest level in eight months, Scotiabank said.
Vehicle purchases softened in Canada in July 2016, a new report from Scotiabank said, as a double-digit decline in car sales more than offset ongoing gains in light trucks.
“We estimate overall vehicle sales declined to an annualized 1.88 million units in July, down from an average of 2 million in the second quarter and through the first half of 2016,” Scotiabank’s most recent Auto News Flash said.
North American manufacturers accounted for most of the decline, the report continued, with their volumes dropping 4% below a year earlier. “However, purchases of imported brands also weakened below a year ago for the first time since mid-2013,” the report said. “In fact, the slowdown was broad-based, with eight manufacturers reporting lower sales in July. We believe the moderation will be temporary, as economic activity and commodity prices are likely to improve in the second half of 2016.”
Turing to the U.S., the report noted that vehicle sales climbed to the highest level in eight months in July, even as some major automakers underperformed. “Purchases totalled an annualized 17.8 million units last month, exceeding expectations and climbing to the highest level since the September-November period when sales consistently exceeded 18 million units,” Scotiabank said. “Retail purchases led the way, with GM’s sales to households advancing 5% above a year earlier. In contrast, fleet volumes fell below a year ago.”
Retail activity was buoyed by enhanced incentives last month, with estimates suggesting that incentive spending in July averaged nearly 10% of transactions prices — the highest level in several years. “Despite rising incentives, industry fundamentals still point to record sales in 2016, leading automakers to add an additional 24,000 units to their third quarter production plans across North America,” Scotiabank said.