TORONTO — New vehicle sales in Canada continued to rebound in July, according to DesRosiers Automotive Consultants Inc.
The firm estimates that sales fell 4.9 per over the same month a year ago. Automakers sold an estimated 165,020 new vehicles in July.
Monthly sales totals are estimates now that the vast majority of automakers has stopped reporting on a monthly basis and turn to quarterly reports.
After a “brutal” collapse in April, monthly sales have steadily climbed, though not to 2019 levels, DesRosiers said. They jumped 147 per cent and 37.3 per cent in each of the following months, before a 6.2 per cent increase in July, DesRosiers noted.
While auto sales made a “strong'' showing in July, the consultant noted that it's still unclear how much of the auto-selling momentum is driven by buyers who have been holding off since spring, when dealerships were in a holding pattern due to COVID-19 restrictions.
“Giant strides become moderate steps, but still, the momentum is forwards,” the report said.
“The long-term implications of COVID-19 on the economy and the automotive market are far from clear and will likely include more twists and turns.”
Scotiabank Economics, which also estimated sales to be down 4.9 per cent, in a report Tuesday called the recovery "remarkable" and said consumer confidence is improving.
The sample size might be small, but the automakers still reporting monthly new-vehicle sales indicated economic recovery from the COVID-19 pandemic continued in July.
Toyota Canada’s total sales were down eight per cent from the same month a year ago. The automaker sold 19,972 new vehicles, according to the Automotive News Data Center in Detroit. However, the luxury Lexus line saw its sales increase 18 per cent in a segment several analysts say will suffer the hardest hit from the pandemic.
The RAV4 was the Toyota brand’s top seller at 6,472 while the Corolla led car sales at 3,375.
Hyundai and Kia both posted increases, up two and four per cent to 13,272 and 8,300 units, respectively. Hyundai’s low-volume luxury Genesis line, which is based on its all-in pricing and online shopping model, fell 19 per cent to 115 units.
There are reasons for the Korean brands’ ability to weather the storm, says J.D. Power Canada’s Robert Karwel.
“Hyundai and Kia are able to get inventory; mainly they have the cars and trucks to sell,” he said in an email to Automotive News Canada. “Second, the industry has seen a strong swing in deal structure to more 84-month financing deals, at low APR [annual percentage rate] plus cash on the hood, and the Korean brands have been better at structuring their retail along those lines than some other brands, as they are less reliant on leasing and more reliant on financing new customers.”
Karwel said that overall, leasing is still down.
“There are still lots of customers just getting back to market from lease extensions, so there is still some turmoil in the leasing side of the business,” he said.
Hyundai and Kia “had less exposure there than some other brands,” Karwel said.
Honda Canada sold 15,888 new vehicles, including the luxury Acura brand, in July, down 10 per cent from a year ago. Honda brand was off 11 per cent while Acura was down two per cent. Honda Passport and Ridgeline sales were up 62 and 20 per cent to 389 and 35 units, respectively. Acura increased sales of the TLX and RDX by 18 and 10 per cent to 291 and 901 vehicles, respectively.
Volvo sales were up 12 per cent.
Subaru's July sales were up 10 per cent to 5,678.
Rebekah Young, the director of fiscal and provincial economics at Scotiabank Economics, says the auto market is rebounding.
“The Canadian auto market is benefiting from a very solid rebound in activity. This is consistent with broader retail sales across Canada that are preliminarily forecast by Statistics Canada to have surpassed pre-pandemic levels in June. This is likely a result of a combination of pent-up demand from the lockdown, as well as new demand from pandemic-driven concerns around alternative modes of transportation,” she said. “There may also be some brand-switching given supply constraints on high-demand vehicles where North American production is still ramping up to meet this stronger rebound both in Canada and the U.S.
“This reinforces the broader recovery currently underway but some caution is still warranted both as pent-up demand is unwound and in light of significant downside risks on the horizon, related to the course of the pandemic, the ability of U.S. Congress to pass additional stimulus, and election uncertainty.”
The Canadian Press contributed to this report.