But despite posting a decline relative to 2017, the Canadian auto market posted its second best year on record, a new report from Scotiabank said.
January 30, 2019 by Canadian Plastics
World vehicle sales fell in 2018, a new report from Scotiabank said, owing mainly to a sharp contraction in auto purchases in China in the second half of the year amid a Government-led crackdown on non-bank lending – but despite posting a decline relative to 2017, the Canadian auto market posted its second best year on record in 2018.
“We forecast Canadian vehicle sales to fall again in 2019 and 2020 toward the 1.90 million units per year mark,” Scotiabank said in its latest Global Auto Report.
Sales in Western Europe also dropped sharply in the final months of 2018, the report said, owing to a shortage of qualifying vehicles under new emission test procedures introduced in the European Union in September, but still managed a slight increase for the year when excluding the UK.
Canadian vehicle sales closed 2018 with a 2.9% month-over-month (m/m) December decline to 1.82 million units delivered, their lowest one-month total since early-2015,” Scotiabank said. “Compared to last December, purchases fell by 8%. Following 2017’s all-time record of 2.04 million autos sold, sales in 2018 contracted by 2.6% with 1.98 million units driven off dealers’ lots.”
The second half of the year saw a significant weakening of activity in the new autos market which has been impacted by slowing employment growth and rising interest rates, Scotiabank said. “As purchases move toward a long-term equilibrium of around 1.9 million units sold per annum, we forecast vehicle sales in Canada to total 1.93 million units delivered in 2019,” the report said.
U.S. vehicle sales ended 2018 on a strong note, Scotiabank said, with 17.51 million annualised units delivered in December, with increases of 1.5% year-over-year (y/y) and 0.6% m/m. “The twelve-month total of 17.2 million units purchased marked the third best year on record against expectations for a decline from 2017’s figure of 17.1 million autos sold,” the report said.
In Mexico, meanwhile, vehicle purchases fell by 7.1% in last year to 1.42 million units delivered, nearly 200,000 units below 2016’s all-time high of 1.60 million units.
In 2018, Chinese vehicle sales fell for the first time in two decades owing to a pronounced slowdown in economic activity, particularly in the latter half of the year. Total sales for the year sat three percentage points below 2017’s record high, and recorded a sharp year-on-year decline of 14% in December.
In Europe, new vehicle emission tests rules which entered into force in September led to a big swing in sales in the second half of 2018, though auto purchases in Western Europe excluding the UK managed to eke out a 0.3% increase in 2018.
And in South America, a surge in sales of 14% and 16% in Brazil and Chile, respectively, helped to offset a sharp contraction of 23% in Argentinean auto purchases in 2018. “The bulk of last year’s 4.2% rise in South American auto sales was driven by a potent start to the year which was later unwound by weak activity in Argentina,” Scotiabank said.