Cars and trucks at City Buick Chevrolet Cadillac GMC, photographed on Aug. 1, 2017.Fred Lum/The Globe and Mail
The Canadian auto market sizzled again in August, hitting its fourth consecutive monthly record.
Auto makers sold 183,945 vehicles in Canada last month, marking the best August performance after hitting monthly records in June, July and May.
The strong August sales, which were 7 per cent higher than those a year earlier, position the industry to shatter the two-million sales mark for the first time.
Even if sales in the next four months are 4,500 lower on average, the industry will still deliver more than two million vehicles this year.
The current seasonally adjusted annual selling rate is 2.05 million vehicles, DesRosiers Automotive Consultants Inc. said in a note to clients Tuesday, but cautioned that topping the two-million level is not a certainty.
Several factors that have led to record sales in previous months were also at play in August, said Dina Ignjatovic, a Toronto-Dominion Bank economist.
Among those are strong economic conditions – including recoveries in Alberta and Saskatchewan from the impact of low oil prices – in most of the country and car loans that are attractive to consumers in both the rate offered and the length of term to pay them back, Ms. Ignjatovic said.
"All the new technology coming out could also be helping to attract consumers to showrooms sooner than they otherwise might," she noted.
Several auto makers are offering interest-free loans for seven years on many or all of their models, including General Motors of Canada Co., Fiat Chrysler Canada Inc. and Hyundai Auto Canada Corp. Purchasers of Nissan Canada Inc. vehicles can obtain six-year interest-free loans, while Ford Motor Co. of Canada Ltd. is offering its annual employee pricing promotion where buyers pay the same price as company employees.
Ms. Ignjatovic said the pace of auto sales should start to slow down in coming quarters, notably in Ontario, where the frenzy in the housing market has passed, meaning the wealth effect felt by consumers is waning, causing them to have second thoughts about purchasing big-ticket items such as automobiles.
General Motors topped the sales chart, buoyed by a 28-per-cent increase from year-earlier levels.
Sales declined, however, for the other two members of the Detroit Three, Fiat Chrysler and Ford.
The shift in the market toward trucks should play into the key strength of the Detroit Three. But their offshore-based rivals now offer as many models as the Detroit Three that count on the truck side of the ledger, notably in the crossover segment, which is the hottest slice of the market.
The Honda division of Honda Canada Inc., for example, owns the bestselling passenger car in the country, but sells just three passenger car lines, while offering five vehicles that are counted on the truck side of the ledger.
Several Asia- and Europe-based companies reported record August deliveries, which contributed to a 58.7-per-cent market share for those companies last month, compared with 41.3 per cent for the Detroit Three.