by Michael Hatch,
Special to Wheelstalk.com -
With all manufacturers reporting final new vehicle sales for 2012, the results are in. Last year was a very good one for the retail automotive market in Canada, and new car demand came tantalizingly close to the all-time record set in 2002.
Overall, sales were up a very strong 5.7 per cent in 2012 over the previous year, and every province and territory in the country posted positive sales growth. Ten of the twelve months of 2012 saw positive year-over-year growth and despite a relatively slow December, we came within about 1.6 per cent of a new record for new car sales in Canada. With just modest growth this year, we will hit a new record well in excess of 1.7 million new cars sold across the country.
Though uncertainties remain, most of the fundamentals that drove solid results last year remain in place for 2013, which will augur well for dealers, manufacturers, and consumers alike in Canada in the year to come. Affordability remains near all-time highs; finance rates are low and financing options abound for consumers across the spectrum of models; job growth finished the year very strongly and we now have the lowest unemployment rate (7.1%) in four years; there even seems to be some pent-up demand still manifesting itself in the marketplace in the wake of the downturn, now several years old.
These factors, together with strengthening economic growth we should see in Canada this year, will help set a new record for new vehicle demand in Canada in 2013.
Masked by the overall 5.7 per cent growth level is an even more impressive one for passenger cars (as opposed to trucks): car demand surged by 9.5 per cent in 2012 as about 67,000 more cars were sold last year than the year before. Though truck demand grew by a less-stellar yet still solid 2.7 per cent, the pace of growth for passenger car demand stands out as one of the single best major indicators for the Canadian economy in 2012.
Though demand is strong, competition for market share remains fierce between an ever-growing list of industry players. For consumers, 2013 looks set to continue the recent golden age for new cars: more product for less money.
Michael Hatch is the Chief Economist with the Canadian Automobile Dealers Association: www.cada.ca