Canadians really like gas-powered trucks
Sport utes and pickups account for about 70 per cent of total sales
Canada’s annual sales of new vehicles will be about two million. Estimates put used vehicle sales at about three million. We buy a lot of cars. Light trucks, actually. For all the jabber after the last economic crash a decade ago, the one that took the leasing industry with it, we’ve left behind the promise of subcompact vehicles, become bored with sedans and continue to shun the hybrid and electrics that dominate headlines but little else.
“Sixty-eight to sixty-nine per cent of the market this year is light trucks,” says Dennis DesRosiers, of DesRosiers Automotive Consultants. “In fact, for four of the past 12 months, it’s been over 70 per cent, and this will stay positive for another year, at least.”
DesRosiers crunches numbers; he cares little about what ad campaigns say we should be buying, and instead reports on what we are buying.
“In 1990, there were 600,000 vehicles on the road that were over 10 years old. Today, there are 11 million, and over the next two years that will grow to 12 million,” DesRosiers says.
There were two million used car sales in 1990; DesRosiers predicts that will leap to 3.5 million over the next couple years. It’s the fastest growing part of the market, and all for one reason.
“Quality, quality, quality,” he remarks.
Even with the resurgence of the leasing game — which reached a high of about 40 per cent of sales before the 2008 meltdown and now has rebounded to about 30 per cent — about half of lessees are choosing to buy out their vehicles at the end of the lease.
“At the end of that three- or fouryear term, they like their cars, they trust their cars, and the refinance amount is still very manageable,” DesRosiers says.
It’s true we’re keeping our cars longer, and our cars have longer lives even after we give them up. DesRosiers suggests the life cycle of a new car today is close to thirty years before it finally leaves the road. But John Raymond, a consultant with the Automobile Protection Association (APA) hesitates over that figure.
“Twenty years-plus, with regular maintenance and some level of corrosion treatment. The cost of repair generally drives the scrap-age rate,” Raymond explains.
Of course, there will always be a segment of the car-buying public who have to have the latest upgrades. The extended lifespans of today’s cars is also complicated by another factor: fuel economy.
“Vehicles are getting at least two per cent more efficient each year; that means today’s model will be 20 or 25 per cent more fuel efficient than the same one from a decade ago,” DesRosiers says.
Which naturally leads the discussion in an electrifying direction — or doesn’t.
“Electrics are up, but they comprise a blip in the sales numbers. Hybrid sales are down for the fifth year in a row,” he says.
“When sales of electrics comprise just 5,000 vehicles out of that two million, the OEMs (car companies) have a headache.”
He’s right. And that 5,000 was almost entirely triggered by rich rebates in three provinces — Ontario, Quebec and B.C. Raymond lists three barriers to electric sales taking off.
“The cost of entry, despite heavy subsidization, is still high. Range anxiety is still very relevant, and thirdly, the ability to consistently charge the vehicle remains an obstacle. Not everybody lives in a house,” he says.
So if nobody is buying hybrids and electrics, why is that all we hear about?
“I blame you guys,” DesRosiers says. “The media play it hard and the OEMs are taking a huge risk on technology that — look at the numbers — nobody wants.”
Those internal-combustion engines are doing more with less, doing it better, and doing it for longer. Electrics seem to be the answer to a question nobody asked, at least in the passenger and light truck vehicle segment.
As another record sales year closes, the industry is happy to shovel SUVs after CUVs after pickups to a public who can’t seem to get enough. So, are we starting to mimic American buyers?
“Canada is pretty boring,” he says. “We buy the least amount of vehicle we need; Americans buy the most.”
And everybody wonders why Canada loves hatchbacks so much.