Canadian Auto Sales Poised for Upswing: Scotiabank

Terri Goveia | February 1, 2010

Auto sales in Alberta and British Columbia are set to surge after a year-long slump, predict analysts at Scotiabank.

Canadian provinces will be part of the global auto market’s rebound, although “resource rich” provinces like British Columbia and Alberta will lead the recovery, buoyed by increased drilling in those areas, according to the Scotiabank Group’s Global Auto Report. Canadian sales of cars and light trucks in December 2009 marked a year-over-year increase for the first time since the global economic downturn in 2008, following a 22% increase in global auto sales for the same period.

“This is another sign that the global economy, including Canada, is now in recovery mode and will help lift Canadian light vehicle purchases to 1.53 million units in 2010 — up from a decade low of 1.46 million last year and only slightly below the 1.59 million average of the past decade,” the analysts state in the report, released January 29.

Population growth, new drilling

New drilling projects and strong population growth in Alberta—2.3%--will spur sales there, while new jobs, Olympic consumerism and the aging fleet of vehicles in British Columbia will also help boost auto sales in that province, the report forecasts. Higher oil prices will likely boost car and light truck sales from 184,000 to 198,000 units in 2010, while sales are poised to hit 158,000 units  in British Columbia this year, up from 150,000 in 2009.

The rest of the country will also see a rebound: sales in Saskatchewan are expected to climb to 46,000 units in 2010 following an 8% decline last year, and Manitoba is expected to reach the same level. Sales in Ontario are set to hit 557,000 units in 2010, up from 535,000 last year. “Sales will be bolstered by the termination of a four-year cyclical decline in North American vehicle output, as sales bounce back in the key U.S. market,” the report notes.

Quebec and the Maritimes will also see higher sales, with a 3% increase projected for Quebec—to 402,000 units—and a jump from 115,00 units to 119,000 units in the Maritimes.