After climbing back to within 4.9% of the year-ago norm in July, Canadian auto sales in August were down about 8.9% from the same month in 2019, as estimated by DesRosiers Automotive Consultants (DAC). Estimated sales of 165,837 units for the month compared to 182,040 units sold in August 2019, and they were within approximately 900 units of July’s total.
“After five months of violent swings in the market — first precipitous declines and then remarkable recoveries — we finally have a measure of stability,” said Andrew King, Managing Partner of DAC. “The consolidation of the market is definitely a positive, although underlying dynamics remain volatile and we do expect further twists and turns in the coming months.”
While a stable decline of close to 10% might not seem like good news, from a dealer perspective the situation may be better than it sounds, considering that much of the decline has been absorbed on the fleet-sales side.
“Given fleet sales are still depressed, the retail sales rebound is even stronger, showing signs of not only pent-up demand, but also pandemic-motivated purchases,” observed Rebekah Young of Scotiabank Economics. She added that “New income support recently announced (by the Federal government) will likely further underpin the recovery in auto sales into the Fall.”
DAC cautions, however, that the short to medium-term sales outlook is still very much a matter of debate. As the government starts to scale back its support of the economy, the implications for the automotive market remain unclear. And the shifting public health and regulatory environment is still unstable and will continue to dictate market and economic performance in the months ahead.
August’s SAAR (Seasonally Adjusted Annualized Sales Rate) of about 1.81 million, as calculated by DAC, is up marginally from July, while still well below established norms.
Year-to-date sales of 975,356 new vehicles remain down by 27.0 % from 2019 — a modest improvement of 2.8% from July’s position. If August’s 9% sales wane does represent a stable level for the rest of the year, we can expect annual sales of about 1.5-million, which would be a yearly decline of just over 20%.
Scotiabank is more optimistic, however, maintaining its forecast of a 1.6-million-unit year, which would require outpacing 2019’s sales over the next four months. It’s an ambitious target, but we can hope!
Most reporting brands beat market average
Given that the majority of automakers no longer report monthly sales figures, it’s difficult to make comparisons among brands. That said, five of the six brands still reporting boasted results that outperformed the overall market.
Volvo (+25.5%), Kia (+14.9%) and Subaru (+11.5%) all achieved-double-digit percentage increases over the same month last year — Kia had its best month ever and Subaru its best-ever August. And both Hyundai (+0.4%) and Mazda (-4.8%) beat the market average. Genesis (-28.7%) was the only reporting brand with results that lagged the market.
All automakers are scheduled to report third-quarter results at the end of September, which will provide us with a better sense of relative market performance.
