New vehicle sales in Canada jumped to a record high of 1.98 million units in September 2015, surpassing the previous peak set a year ago, according to new data from Scotiabank.
The gains are being driven by broad-based advances in leasing activity and a moderate improvement in fleet volumes, Scotiabank said in its latest “Global Auto Report”. Quebec and British Columbia are leading the gains in leasing, with activity surging by more than 20 per cent so far this year. “However, every province has reported increased lease volumes in 2015,” wrote Scotiabank economist Carlos Gomes, the report’s author. “The stronger-than-expected performance in leasing activity has led us to increase our annual 2015 Canadian sales forecast to 1.87 million units, up from 1.855 million.”
The report also noted that Canadian used car prices are “gaining momentum.” “Canadian used car prices began to soften a year ago alongside a rising supply of vehicles coming off-lease, but the decline has proven to be short-lived,” Gomes wrote. “Prices resumed their upward trajectory in the spring as rising demand for pre-owned models from Canadian households and foreign buyers have overwhelmed a moderate increase in used vehicle supplies. In particular, the sharp depreciation of the Canadian dollar over the past year has led to a surge in the number of used vehicles exported to the United States.”
Purchases continue to gain momentum across North America, the report continued. “New vehicle sales surged in the United States to an annualized 18.1 million units in September, the highest level in more than a decade,” Gomes wrote.
The report also noted that global car sales have moderated in recent months, undercut by double-digit declines in South America and Eastern Europe, as well as slowing purchases across Asia. “In contrast, volumes continue to improve in Western Europe,” Gomes wrote. “In fact, purchases across Western Europe accelerated to a double-digit gain in August/September, up from an 8% increase in the first half of 2015 and widened its lead over other regions. The gains in Western Europe reflect a strengthening labor market, significant replacement demand and increased credit availability. However, the improvement is likely to moderate in coming months alongside the fallout from the recent emissions scandal at the world’s largest automaker. For example, an early October survey of investor confidence in Germany fell to its lowest level of the past year, potentially pointing to a pullback in household spending.”
