After bottoming out in Q2, auto sales in Canada rebounded in the third quarter of 2020 to just 3.9% below 2019 levels. While the sales recovery showed signs of faltering in August, it bounced back strongly in September with an estimated 169,876 vehicles sold, according to DesRosiers Automotive Consultants (DAC) — an increase of 2.4% from the same month last year, and the fifth-best tally ever for the month.
In addition, the SAAR (Seasonally Adjusted Annualized Sales Rate) for the month was about 1.92-million units, according to DAC, which is right in the ball-park of 2019’s overall sales. It is a particularly impressive result given that fleet sales have typically been hurt even more than retail.
Of course, the impact of pandemic-related declines over the past six months mean that year-to-date sales of 1,145,226 units are still down by 23.7% from the same period last year and prospects for the remainder of the year remain uncertain.
“Having the automotive market back in positive territory for a month is a huge step forward for the industry,” said Andrew King, Managing Partner of DAC. “Whether this momentum can be continued through the fall is an open question given the economic and social restrictions that may be put in place as part of the second wave.”
David Adams, President, Global Automakers of Canada concurred, noting that “the wild card is the second COVID wave and whether or not we will see dealerships in certain jurisdictions close for a period of time, as they did with the first wave, and/or consumers limiting their movements.”
If the market does stay steady at 2019 levels for the rest of the year, overall sales should come close to 1.56-million units — an ultimate decline of 18.5%.
More optimistically, Rebekah Young of Scotiabank Economics, said “We maintain our sales forecast outlook at 1.6-million units for 2020, with some upside from the continuation of government supports but counterbalanced with ample downside risk remaining in the final quarter of the year.”
Adams cautioned, however, that if the current 23.7% level of sales deterioration is maintained through the fourth quarter, “sales in Canada will fall on a full-year basis to under 1.47 million, which is softer than many analysts have forecast. You would have to go back to the financial crisis of 2008/09 to find lower annual sales numbers.”
All of which means the only certainty for the balance of 2020 is more uncertainty!
Cars slip further behind
The ongoing decline of passenger car sales in favour of pickups, vans and utility vehicles, including crossovers (light trucks), continued apace in Q3. Sales of 399,186 “light trucks” in the quarter were up by 1.8% from a year ago, while sales of 101,548 passenger cars were down by 21.4%.
“Light trucks” claimed 79.3% of total market share for the year to date, while passenger cars accounted for just 20.7% of the market — a 5.4% further shift from the same period last year.
Ford stretches it lead
While the overall market was up in September and approaching normal for the quarter, that was not the case for all brands, as individual results varied dramatically. Ford was one of those on the plus side of the scale, with 84,061 Q3 sales up 8.5% from a year ago. As a result, its year-to-date sales of 188,293 vehicles are down just 18.6%, well ahead of the market average, and its market share is up 1.0% to 16.4% — the greatest share gain in the industry.
General Motors maintained second place in sales, behind Ford, but the OEM’s 63,120 sales in Q3 were down 10.5% from a year ago. Year-to-date, GM’s 161,535 sales are down 20.7% from a year ago and market share is up 0.5% to 14.1%.
Toyota surpassed FCA for third place in Q3, with 57,287 sales — a gain of 0.6% from last year, but it remains fourth in the year-to-date rankings. Cumulative sales of 125,663 cumulative units are down 23.8% from last year, closely in line with the market average, keeping Toyota’s share steady at 11.0%.
FCA sold 54,399 vehicles in Q3, a decline of 10.7% from last year that dropped it to fourth place for the quarter. Total sales of 132,257 are off by 26.0%, compared to 2019, dropping FCA’s share by 0.4% to 11.5%, but that is enough to keep it in third place for the year-to-date.
Honda maintained fifth place with 41,486 Q3 sales, an 11.5% decline that resulted in 94,900 cumulative sales, cutting market share by 0.7 % — the second-largest decrease in the industry — to 8.3%.
Kia, Hyundai continue to gain
Hyundai surpassed last year’s results in Q3 with 39,199 sales, a 2.5% increase that brought it within 2,650 units of catching Honda for fourth place in the period. Year-to-date, Hyundai has sold 82,839 new vehicles, down 19.7% from a year ago, improving share by 0.3% to 7.2% in a market that was down more.
Nissan hung on to sixth place with 27,827 vehicles sold in Q3, a decline of 12.5%. Total sales of 62,358 units through three quarters were down by 36.2%, cutting market share by 1.1% to 5.4% — the greatest share decline in the industry.
Not far behind and gaining, Kia sold 25,090 new vehicles in Q3, 14.7% more than in the same period in 2019. Over the year-to-date, Kia 53,933 sales are down by just 10.3% — the best performance in the market — improving market share by 0.7% to 4.7%, which is second-best only to Ford in percentage improvement.
Mazda’s 19,053 Q3 sales were up by 0.9% from a year ago, consolidating its grip on ninth place in the rankings. Its year-to-date sales of 41,634 units were down by 19.0%, beating the market average and bumping market share up 0.2% to 3.6%.
Subaru leap-frogged Volkswagen to complete the top-ten in Q3 with its 17,565 sales up 19.9%, aided by best-month-ever September results. The surging Japanese brand still ranks eleventh for the year-to-date, however, with its 35,717 sales down just 15.1%, increasing market share by 0.3% to 3.1%.
Volkswagen slipped to eleventh place with a 13.3% sales decline to 16,698 units in Q3. It still ranks tenth on the year-to-date tally where its 37,546 cumulative sales are down by 28.0%, dropping its market share by 0.2% to 3.3%.
Mercedes-Benz still outpaced the rest of the luxury brands to claim twelfth place overall in Q3, ahead of Audi, BMW and Lexus in that order. All those except Lexus lagged the overall market performance.
Winners and losers
While the overall market seemed to return to a normal level in September, boosting overall Q3 results in the process, as always there were significant deviations from the average among individual players.
In that context, in terms of percent change from 2019 performance, the big “winners” for Q3 were: Porsche (+22.5%); Subaru (+19.9%), Volvo (+19.7%); Kia +14.7%); and Ford (+8.5%).
The greatest “losers” among active brands were: Jaguar (-48.5%); Infiniti (-34.7%); Mitsubishi (-32.0%); BMW (-25.1%); and Genesis (-21.8%).
It should be noted that the sales figures reported here are reconciled quarterly by DesRosiers Automotive Consultants (DAC) based on sales reported by manufacturers.
