TORONTO—Global car sales fell 2.5 per cent below a year earlier in April, marking the first monthly year-over-year decline in nearly two years, but Scotiabank believes this dip reflects temporary distortions.
More recent sales data for May, reported in the bank’s Global Auto Report, points to a reversal of the April slowdown across many countries, including Canada.
Scotiabank says Canadian auto sales have exceeded expectations this year as strengthening economic growth has led to a sharp rebound in purchases in the resource-rich Prairie provinces, particularly Alberta, including a recovery in fleet volumes.
Car and light truck sales rose 11 per cent year-over-year in Canada in May, the largest gain in almost three years.
“We’ve raised our 2017 Canadian sales forecast to 2 million units, up from 1.94 million due to a stronger-than-expected recovery in the Prairies,” said Carlos Gomes, senior economist and Auto Industry specialist, Scotiabank.
Gomes continued, “The car and light truck sales acceleration in the Prairies this year includes an 18 per cent year-over-year surge in May—the largest increase in more than four years.”
Gomes says the Prairies are the only region in Canada to post double-digit sales gains so far this year, accounting for more than double the region’s historical share of the Canadian new vehicle market.
A double-digit increase in capital spending by the oil patch in 2017 has also led to additional business purchases of new cars and light trucks in Alberta.
Fleet volumes at Calgary dealerships have risen 20 per cent year-over-year through April, and this surge represents half of the nationwide increase in fleet volumes through the first four months of the year.
While Alberta is the key driver of decade-high fleet volumes in Canada in 2017, Scotiabank says sales to businesses have also picked up in several other provinces alongside a strengthening corporate profit outlook.