Canadian vehicle sales down in December: Scotiabank

Canadian vehicle sales climbed to a fourth consecutive annual record, but ended 2016 on a weak note, with December volumes declining 3% below a year earlier, according to a new report from Scotiabank. “We estimate that car and light truck sales totalled a seasonally adjusted annual rate of 1.90 million units in December, down from an average of nearly 2 million during the previous three months,” Scotiabank’s latest Auto News Flash said. “Light truck sales continued to move higher last month, but car sales dropped 9% below a year earlier, reducing their share of Canada’s auto market to less than 30% in December for the first time on record.”

Despite the sluggish performance in December, full-year 2016 volumes totalled 1.95 million units, the report said, 3% above the previous year’s record. “Purchases have consistently climbed to new annual records since 2013, but are likely to trend lower over the coming year, pressured by some deterioration in vehicle affordability,” Scotiabank said.

In the U.S., meanwhile, purchases accelerated sharply in December, Scotiabank said, climbing to an annualized 18.3 million units and setting a record for the month of December. “The stronger-than-expected year-end performance lifted 2016 volumes to 17.5 million units, surpassing the previous year’s peak and setting a second consecutive annual record,” the report said. “In fact, U.S. car and light truck sales have now advanced for seven straight years, an accomplishment last seen when the industry was still in its infancy during the early 1920s.”

The bank also expects volumes to edge up further in 2017, buoyed by stronger economic growth. “The U.S. economy is projected to expand by more than 2% this year, up from only a 1.6% gain in 2016 – a solid labour market, and the recent jump in consumer confidence to the highest level since early 2001,” the bank said.