Canadian auto sales in February were down nearly 10 per cent compared with February 2020, the last full month before the lockdowns began due to the COVID-19 pandemic, according to estimates compiled by DesRosiers Automotive Consultants
The firm on Wednesday said auto sales last month totalled 112,654 units, down from the 125,059 units of February 2020.
DesRosiers says despite some lifting of pandemic restrictions, much of the country was still in various degrees of lockdown.
The restrictions, combined with microchip supply chain disruptions, led to a drop in light vehicle sales, the firm says.
The move of buyers away from cars towards the light truck market also continued.
Light trucks accounted for 83.5 per cent of the market in February compared with 78.9 per cent a year ago.
Andrew King, managing partner at DesRosiers said the seasonally adjusted annual rate of sales came in 1.84 million units, meaning if February’s sales pace continued in each of the next 10 months, dealers would sell that number of vehicles in 2021.
With February being the last month of “normal” comparables with 2020, King said the SAAR is the important number to watch in 2021.
He called it “a variable to which we will be paying even closer attention in the coming months, as year-over-year comparisons become less meaningful.”
Meanwhile, Tim Reuss, head of the Canadian Automobile Dealers Association, said on Tuesday he expects 2021 sales to be flat compared with 2020’s total of 1.54 million.
Two of the automakers that still report monthly Canadian sales posted double-digit losses by percentage in February as COVID-19 and a global microchip shortage refused to loosen their grip on supply chains.
Honda’s Canadian sales plunged 17.6 per cent while Toyota’s fell 10.1 per cent, according to the Automotive News Research and Data Center in Detroit.
At the same time, Volvo sales surged by 10.1 per cent while Hyundai and Kia saw their sales rise 3.2 and 1.2 per cent, respectively.
The slides and modest gains didn’t surprise Rebekah Young, director of fiscal and provincial economics at Scotiabank Economics.
She said the COVID-19 pandemic and global shortage of microchips are further affecting inventory.
“I expect February will be a weak sales month on both sides of the border in spite of the strong economic recovery underway, supported in part by ongoing support to households,” Young said in an email. “Supply constraints will likely start translating into lower sales volumes over the next couple of months at least for automakers that have had to temporarily halt production.
“We are only at the early stages of seeing a rebalancing in [chip] supply in a process that is likely to extend into the second quarter, absent a ramp-up in chip production capacity.”
Young said the chip shortage could drive sales down 5-10 per cent in each of the next couple of months, with some manufacturers affected more than others.
The low inventory could force customers to buy something other than what they initially wanted, but the more likely scenario is that it would push pent-up demand later into the year, she said.
“Of course, the longer the shortage endures, the less runway there is to make up for lost sales this calendar year so this is something we will be watching closely as it represents a real risk to our 2021 sales forecast in Canada and the U.S.”
Reuss described inventory on Tuesday as “extremely tight, across the board.”
Some brands have weathered the storm better than others, but today, just about every brand is affected, he said.
“The only silver lining is that this is happening in not necessarily the peak selling season in Canada,” Reuss said, “but the peak selling season is almost here.”
The Canadian Press contributed to this report.