Prairies, Nova Scotia push sudden boom in auto sales
Double-digit sales growth in the Prairie Provinces is driving strong auto sales in Canada, suggesting the market is poised to recover after years of decline.
May auto sales across the country increased 11.2 per cent when compared with the same time last year, according to data compiled by DesRosiers Automotive Consultants, with Nova Scotia and the Prairie Provinces leading the growth. Nova Scotia saw sales increase 23 per cent, while Saskatchewan sales went up by 18.8 per cent. Alberta and Manitoba recorded 17.8- and 15.5-per-cent boosts, respectively.
Dennis DesRosiers, president of DesRosiers Automotive Consultants, said the strong sales increases in the Prairies are a sign that, despite low oil prices, other aspects of the economy are doing well.
“I think they have clearly bottomed out and are poised for a recovery,” DesRosiers said. “If you look at it just from a vehicle sales point of view, for most of the last half of last year they were neither going up or down, and essentially scraping along the bottom. Then in March, we started to see growth … I think the worst is behind them.”
The stronger than expected recovery in the Prairies prompted Scotiabank to increase its 2017 Canadian sales forecast to 2 million units, up from 1.94 million. The Scotiabank Global Auto Report, released last week, said strengthening economic growth has led to a sharp rebound in purchases in the Prairie Provinces, including a recovery in fleet volumes.
According to the report, car and light truck sales in the Prairies increased by 18 per cent in May when compared to last year, the largest increase in more than four years, accounting for 37 per cent of the overall increase in new vehicle sales in Canada.
“The Prairie region as a whole is now back in growth mode and that’s obviously a positive for Canada as a whole,” said Carlos Gomes, a senior economist and auto industry specialist at Scotiabank.
“We had started to see improvement earlier this year, but the key message is that it has continued to gain momentum as we’ve moved through 2017.”
Gomes pointed to stronger employment in Calgary, which saw the fastest job creation in two years, as a factor in lifting auto sales in Alberta. As of April, car and light truck sales in Calgary accounted for 40 per cent of sales in Alberta this year, a boost from a low of 32 per cent in late 2015. Fleet volumes at Calgary dealerships also surged by 20 per cent through April, making up nearly 70 per cent of new fleet activity in the province.
Passenger car sales also increased in Canada for the first time in two years last month, according to DesRosiers. Overall vehicle sales in British Columbia and Ontario also increased, by 11.2 and 11 per cent, respectively.