Decline in Canadian auto sales enters its 16th month

By: Lisa Coxon on July 5, 2019

Canadian auto sales continued to fall in June, for what marks the 16th consecutive month that of tumbling sales, according to a report from Toronto-based DesRosiers Automotive Consultants Inc. 

Overall auto sales dipped 7.2% last month, when compared to the same month last year. 

“We’ve been expecting single digit declines all year and that’s exactly what we’ve been getting. The auto markets have always been cyclical and we’re clearly in a correction period,” Dennis DesRosiers, president of the consultancy, told the Financial Post.

One reason for this, DesRosiers said, could be because most people will purchase a new vehicle near the start of a cycle and hang on to it for about 10 years (which is how long most vehicles are built to last for), which then leaves the auto market saturated.

Brands like Fiat Chrysler, Ford, and General Motors are all reporting lower sales. Year-to-date, auto manufacturers have sold around 980,000 vehicles, compared with more than one million during the same time period in 2018.

Even luxury vehicles — a typically reliable segment for sales growth — weren’t spared.

In 2008, DesRosiers reports that luxury cars had a 7.1% share of the country’s market. 

As of 2018, that number grew to 12.1%.

But DesRosiers has been keeping an eye on a decline in luxury vehicle sales since January. 

Mercedes-Benz sales dropped 17.7% year-to-date. Audi sales dropped more than 20% and BMW sales fell 6.6% in the same period.

“We wonder if some of that is ‘pretend’ luxury buyers, people that got into the luxury market but really weren’t legitimate luxury buyers,” DesRosiers told the Post. “Now that vehicle is eight or nine years old we’re back down to a more normal situation and they just can’t afford to go in.”

Despite the bleak sales, vehicle ownership, oddly enough, is at an all-time high. DesRosiers reports that 86% of Canadians — or 28 million people — now own a vehicle, compared with only 17 million people in 2000.

“We’re becoming very American-like in our ownership habits and the types of vehicles we’re driving,” said DesRosiers, pointing to popular brands like Ford, General Motors, Fiat Chrysler and Toyota.

Still, DesRosiers told the Post that he’s expecting this deceleration trend to continue through the end of 2019 and possibly even into next year.