Canadian vehicle sales hit 2M mark for first time

Demand soars for crossovers, light trucks

Despite posting weaker sales in December, automakers sold a record 2.038 million new vehicles in Canada in 2017 as more drivers opted to purchase SUVs and trucks over passenger cars.

The light-truck segment — which includes SUVs, pickup trucks and vans — accounted for 68.6 per cent of the market share, an increase of 8.7 per cent when compared to 2016, according to DesRosiers Automotive Consultants Inc. At the same time passenger car sales fell 3.4 per cent to the lowest level since 1964 with 639,823 units sold, compared to 1.39 million light trucks.

“While we had a decline (in December) on a yearover-year basis, the strength during all of 2017 was such that we shattered the previous record, surpassing two million units for the first time ever,” said Carlos Gomes, a senior economist and auto industry specialist at Scotiabank.

“It’s good news in the sense that it highlights that the consumer is coming back to the market with soaring demands for crossovers, but it’s also telling us that business investment is also strengthening, which is confirmed by a sharp improvement in pickup truck sales.”

Ford Motor Co. held on to the top Canadian sales spot in 2017, despite seeing its December sales drop by 11.3 per cent. The American automaker finished the year with 308,474 units sold, an increase of 1.3 per cent from 2016. Ford said its F-Series was Canada’s best-selling vehicle for the eighth year in a row, with sales of 155,290 units.

General Motors Co. trailed Ford but delivered strong sales in December with 19,801 vehicles sold — an increase of 9.2 per cent year-over-year — to bring its 2017 sales total to 302,826, a 13.3-per-cent jump from 2016. Its GMC brand saw December sales jump 47.4 per cent when compared to last year, and reported its best year ever, with a 15.1-percent sales increase from 2016.

Toyota Canada recorded its best sales year ever in 2017, bolstered by record hybrid, truck and Lexus vehicle sales. The automaker sold 12,615 vehicles in December — a decrease of 7.6 per cent from the previous year — but saw its overall 2017 sales increase by 3.1 per cent to 224,547.

Some automakers did not manage to post annual sales increases, including Fiat Chrysler and Hyundai. FCA ended the year with 267,052 vehicles sold, a decline of four per cent from the previous year. Its most popular vehicle this year was the Dodge Ram truck, which saw sales jump 10 per cent to 98,465.

The record in light truck sales comes as automakers shift their production to meet increasing SUV and truck demand. The GM plant in Oshawa, Ont., is being repurposed to start producing GMC Sierra and Chevrolet Silverado trucks starting this month.

Gomes says the strong light-truck sales are not expected to disappear anytime soon.

“We’re likely to see most of the decline in the marketplace occur within the car side of the business, as opposed to the light-truck segment,” he said. “I think the reality is that the practicality and spaciousness of vehicles such as crossovers do mean that we will continue to see their share rise over time.”

Record sales were also posted by almost all luxury car brands, including Audi, BMW, Mercedes-Benz and Porsche.

Gomes does not expect sales in 2018 to surpass the past year’s record, due in part to slightly softer employment growth, but said it will still be “a very good year, probably around the two-million-unit mark once again.”

Meanwhile, as the Canadian government continues to look at ways to increase electric-vehicle adoption, GM’s electric vehicles accounted for a small portion of its overall sales. GM said it is the No. 1 retailer of electric plug-in vehicles in Canada, selling more than 6,400 electric plug-in vehicles last year — about 2.1 per cent of its 2017 sales.

“These market dynamics seem to be at odds with policy-makers both provincially and federally who are working to try (to) educate consumers about the merits of zero-emission or near zero-emission vehicles, the majority of which tend to be mid-sized sedans and not light trucks,” said Global Automakers of Canada, an industry association representing 15 auto companies, in a news release.