TORONTO: Canadians are back in car-buying mode, according to Scotia Economics’ Global Auto Report. The August 30, 2010 report found that volumes at several Canadian automakers reached record-high levels for the month of July.
Vehicle sales in July 2010 hit an annualized 1.65 million units, boosting Scotia Economics’ full-year 2010 Canadian sales forecast to 1.565 million units. New auto sales haven’t seen such an increase since 1996, when the market rebounded from a weak first half of the 1990s.
Global vehicle sales from 2009-2010, in millions of units:
Scotia Economics’ Senior Economist Carlos Gomes credited some of the gain to Canadian job growth, at an average of 43,000 per month. Higher incentives from most automakers also cut new vehicle prices by more than five per cent since February 2010.
Canadians are using the incentives to buy bigger and more expensive vehicles, the report found. Small car sales dropped to less than 29 per cent of overall car and light truck sales — the lowest level in more than 10 years.
Meanwhile, the global auto market continues to experience a slowdown from the 16 per cent surge in the first half of 2010.
“A double-digit slump in Western Europe, due to the expiry of scrappage incentives, accounted for the fall-off,” Gomes said, adding that volumes outside of Europe advanced year-over-year by only nine per cent in July 2010.
In the US, sales increased from 11.2 million units in the first half of 2010 to an annual rate of 11.5 million units in July 2010.
The report predicted that US volumes will stay 20 per cent below the decade-average while Canada’s modest sales gains will continue, with automakers holding the line on pricing in the new model year and more aged cars on the roads needing replacement than there were in 2009.