Canadian car sales break record amid concern about investment in the industry

Canada’s car sellers broke a new record in 2013, surpassing $90 billion in total retail sales for the first time. Revenues at the country’s car dealerships were up 5.7 per cent over 2012. Sales also set a new record, with 1.74 million units sold, according to the Canadian Automobile Dealers Association (CADA).

The chief economist for CADA, Michael Hatch, attributes the strong sales to affordability in the marketplace and strong product choice. Consumers are also “releasing the last of the pent-up demand from the recession,” he said. Many consumers had delayed making a purchase until the economic recovery seemed secure. Hatch called the record sales “great news for the industry but also for the economy at large,” as well as a huge milestone for CADA members.

porsche-car-retail-sales-record-Canada-manufacturing-EDIWeekly
Record-breaking $90 billion sales in 2013 is good for the industry and for the economy, according to the Canadian Automobile Dealers Association. But is investment in the manufacturing side drying up?

The $90 billion in sales represents almost 5 per cent of Canada’s GDP, CADA said in a release. Put another way, it is the equivalent of every man, woman and child in Canada spending $2,500. While this level of expenditure contributes to the overall indebtedness of Canadians, since most car buyers have to finance their purchase, the cost of servicing consumer debt has been falling, said Hatch. The availability of consumer financing is an important part of the car retail business, and consumers are managing their debt very well, he said. In the fourth quarter of 2013, the delinquency rate on car loans was just 0.11 per cent, the lowest default rate of all forms of consumer debt, according to Hatch.

While car retailers have reason to celebrate, the picture is not quite so bright for the auto manufacturing sector. A report from the Office of Automotive and Vehicle Research at the University of Windsor states that of the $18 billion invested worldwide in auto plants last year, none of it came to Canada. The report considers only investment that increases a plant’s assembly capacity, either a new plant or an expansion of an existing plant. Canada, the Windsor report says, has slipped from fourth place among the world’s auto assembly nations to tenth place. China, not surprisingly, has been the biggest winner in the scramble for investment, attracting $12.6 billion in 2013, two-thirds of the global total.

The Canadian Automobile Dealers Association (CADA) is the national association for franchised automobile dealerships that sell new cars and trucks. It has 3,300 dealers, who collectively employ over 130,000 people across the country.

Did you miss this?

Other Popular Stories

  • Pratt & Whitney Canada to invest $1 billion in engine development
  • No fracking for now in Nova Scotia
  • Elon Musk, the master of disruptive technology companies: his life, successes — and failures
  • Who says bigger isn't better: General Electrics massive carbon-fibre 3D printed engine more fuel efficient
  • Kite-style Technology Produces Tidal Power: Green Energy
  • Self-Driving Cars: Virtual Reality's role in "boredom on the road" for passengers of autonomous vehicles
  • A plane? Or, a flying car? The First Electric Flying "Car" Approved for Operation by FAA from Engineering Design Innovators at Alef Aeronautics
  • BMW unveils i3, the electric car of the future
  • Detroit Auto Show Highlights
  • Car Tech Trends from CES 2018
  • Construction industry pleased with majority government in Ontario
  • Bombardier CSeries finally flies the skies of Paris
  • Ontario Tire Stewardship offering $50,000 for recycle projects
  • Ontario responds to lower business taxes in the U.S. with "tax relief" for manufacturers
  • Unusual hydrogen car could soon be built in UK
  • Japanese claim breakthrough in hydrogen storage technology
  • World's largest twin engine Airbus A350-1000 passes extreme weather tests for hot weather above 40 degrees celsius
  • Three Out of Four Energy Companies Hit by Cyber-Attacks in the Last Year
  • Bombardier delays delivery of CSeries jets
  • Is ammonia the jet fuel of the future? What other alternatives are there for commercial aviation?
Scroll to Top