Automotive rebound: Canada, US, bounce back
- November 2, 2011
Despite recent concerns about an economic slowdown, car sales continue to climb according to Scotiabank's Global Auto Report.
September witnessed the strongest advance since February with car sales jumping to a 6 per cent year over year gain.
Across the board, sales climbed: Canada had the highest car sales since April, climbing 2 per cent year over year to an annualized 1.63 million units. Much of that solid gain came from General Motors, which outsold ford during October, as well as a 3 per cent year-over-year rebound at Toyota. US car sales rose an annualized 13.2 million units last month, the high level since that country's "cash-for-clunkers" program in mid-2009.
Used car prices point to healthier auto market in 2012
Used car prices are a leading indicator of the health of the overall auto market, and strengthening prices point to improving demand in 2012. Scotiabank's Used Car Price Index accelerated to a 7.4 per cent year-over-year increase inSeptember, the strongest gain since April 2010. The increase is being driven by double-digit increases for three and four-year-old models.
"The strength in Canadian three-to-four-year old used car prices reflects a sharp reduction in the number of vehicles coming onto the resale market. This shortfall is the direct result of the plunge in fleet and leasing volumes since 2008. The number of leased new vehicles has slumped to only 250,000 units per annum over the past two years - 60 per cent below the average of the previous ten years," notes the report
In addition, fleet purchases of new cars and light trucks in Canada have dropped to roughly 200,000 units annually since 2008 - nearly 100,000 units below the average of the past decade. The strength of the Canadian used car market is corroborated by data from several automakers indicating that their certified pre-owned volumes have posted a double-digit increase through September - a much stronger performance than the 2 per cent gain in new vehicle sales across Canada so far this year.