Canadians want to drive SUVs and trucks rather than cars, a trend, manufacturers say, that’s driven primarily by low/stable fuel prices, low interest rates and buyer preference.
Overall, compact sport utilities lead Canadian sales, with 270,149 units sold — about a quarter of all sales to date this year — through July, according to data provider DesRosiers Automotive Consultants in Toronto. But large pickups sold 207,519 units, just 2,479 behind compact cars and well ahead of all other SUVs.
“Consumers have a set transportation budget of purchase and cost of ownership,” says Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association.
“If the cost of gas goes down, and it’s been down for some time, it generally frees up more money and consumers shift to a larger vehicle. And long-term financing brings down the monthly payments, making them more affordable.”
The definition of truck includes crossovers/tall wagons and car-based sport-utilities, according to David Adams, President of the Global Automakers of Canada.
“It’s almost the reverse of what you saw 10 to 15 years ago, when trucks were 30 per cent [of the market] and cars were 70 per cent,” he says.
Meeting practical needs
Canadian buyers tend to be practical, Adams says, and a vehicle must meet the majority of their needs.
“If you look at the success of a number of companies that had traditionally been strictly passenger cars, once they entered the crossover and SUV market it significantly boosted their overall sales,” Adams says. “It’s about broadening the lineup and making it more responsive to consumer demands.
“It’s hard to pin it down to one thing, but I don’t think you would see the same growth in trucks if fuel prices were where they were two or three years ago.”
Trucks and SUVs are outpacing passenger cars, “but they’re not stealing sales,” says Mike Sinuita, product marketing manager for Ford trucks. “The growth is all on the SUV side, and cars in general are taking a bit of a hit, but the industry’s doing well and people are buying more vehicles overall.
leasing IS A FACTOR
“There are a few things driving this, including the popularity in leasing. When recession struck in 2008 and 2009, leasing died off, but it is gradually coming back and that has made some of these bigger vehicles more accessible to people.”
Donnelly Baxter, assistant brand manager for Chevrolet trucks, said most full-size truck buyers are coming from other full-size vehicles, and then from midsize and compact SUVs. “Interest rates are at an all-time low, so people can afford to step into something that might have been beyond them [before].
“People also like sitting high, the functionality, and fewer restrictions of what you can do [with a truck].”
All say the trend isn’t likely to change anytime soon. “A lot of research goes into the marketplace and a lot of forecasting into the energy pricing market,” Nantais says.
“And the percentage of older vehicles on the road is high. There’s still untapped potential in new-vehicle sales.” — ANC