Manufacturing AUTOMATION

Auto sales surge in Canada, U.S.: Scotiabank

September 25, 2014
By The Canadian Press

Global light vehicle sales eased back on the accelerator in August, but in Canada and the United States it was still full speed ahead, according to a new report from Scotiabank.

Bank senior economist and auto industry specialist Carlos Gomes said auto sales around the world were up a meager one per cent in August compared with the same month a year ago — the smallest advance of the past year.

Gomes said that was because solid gains in North America and China were largely offset by a slowing of the pace of improvement in Western Europe and double-digit declines in both Eastern Europe and South America in recent months.

In particular, purchases have dropped sharply in Russia since the spring, but continue to advance in the new European Union members of Eastern Europe.


In the United States, car and light truck sales surged to an annualized 17.4 million units in August, a level matching the annual sales peak in 2000, and up from an average of 16.6 million over the previous three months.

In Canada, passenger vehicle sales remained above an annualized 1.9 million units for the second consecutive month, as enhanced incentives and the popularity of light trucks — especially crossover utility vehicles — more than offset a weak job market.

“The stronger than expected sales performance of recent months has prompted us to increase our 2014 full-year Canadian sales forecast to 1.79 million units, up from 1.77 million previously,” Gomes wrote. “However, we expect sales to moderate once employee pricing and other discounts expire at the end of September.”

Meanwhile, the improving sales has been good news for the Canadian auto parts sector, which has been rebounding as a result of the recovery in U.S. vehicle sales, the highest North American production in a decade, and the depreciation of the Canadian dollar over the past year and a half.

“Auto parts shipments and exports have posted double-digit gains so far this year, climbing in July to the highest level since late 2007 prior to the global economic downturn,” the report said. “The industry has also started to make inroads in becoming more geographically diversified, with shipments outside of the United States advancing by 19 per cent so far this year — the largest increase of the past decade.”

While vehicle production in Canada has been dampened this year by the retooling for new products at several assembly plants, the parts sector has become a leader in Canada’s manufacturing revival in 2014.

Auto parts shipments are up 14 per cent to date, nearly triple the increase in overall manufacturing activity. Leading indicators point to further gains, as both new and unfilled orders have outpaced the increase in auto parts shipments this year, the report said.

In addition, stronger than expected car and light truck sales in the United States over the summer months have prompted automakers to further boost their fourth-quarter vehicle production schedules for Canada, the United States and Mexico.

“Given strengthening demand, we expect North American vehicle assemblies to climb to a record 17.8 million in 2015, surpassing the previous peak of 17.7 million in 2000,” Gomes said.

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