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August 04, 2021 03:50 PM

July sales fell 5.7% as 'normalcy remained an elusive goal' due to chip, inventory shortages

Toyota, Subaru post record numbers while Hyundai and Mazda fell

Greg Layson
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    Greg Layson

    New-vehicle sales in July fell nearly six per cent compared with the same month a year ago, according to DesRosiers Automotive Consultants, which said “normalcy remained an elusive goal” in the industry as semiconductor and inventory shortages continue.

    The firm estimates automakers sold 155,657 vehicles last month, down 5.7 per cent. Monthly sales totals are estimates now that the majority of companies have turned to quarterly reporting.

    “Some dealer lots resembled barren wastelands, and the industry continued to battle its supply/demand mismatches,” the consultancy said in a statement. 

    The seasonally adjusted annual sales rate (SAAR) for the month reached 1.71 million, building on improvement seen in June when the number was 1.65 million. However, July’s SAAR remained well below March’s 1.92 million.

    “Beneath the somewhat tepid top-line number, it was not all doom and gloom with some manufacturers increasing sales from 2020,” Andrew King, managing partner of DesRosiers. “These disparities in performance are the real story for the month, and will likely persist for the remainder of the year as the impact of the semiconductor shortages continue to vary greatly by model and by manufacturer.”

    Toyota Canada managed to shake off inventory shortages, pandemic restrictions and seemingly anything else currently negatively affecting the auto industry en route to a record July.

    The automaker sold 23,845 new vehicles, up 19.4 per cent over the same month a year ago and up 10 per cent over July 2019, when sales were unaffected by the COVID-19 crisis.

    The Canadian-made RAV4 saw record July sales of 6,702, making it the best-selling vehicle in Toyota’s lineup. Highlander’s 2,070 sales were also a record.

    Meanwhile, the company’s Lexus luxury division reported its fifth consecutive month of record sales with 2,608 units sold, with the Lexus UX, NX and RX CUVs all experiencing July records.

    Electrified vehicles account for 28 per cent of Toyota Canada’s overall sales in July.

    With inventory so tight at many dealerships, Robert Karwel, senior manager of automotive practice at J.D. Power Canada, says the average incentive per vehicle fell below the $4,000 mark in both May and June — July numbers aren’t yet available. Incentives are at the lowest point since J.D. Power started tracking them in Canada in 2012.

    As a result, Karwel said fewer incentives from automakers make electric vehicles more attractive, because they quality for thousands of dollars in government rebates. On PEI for example, there is a provincial incentive worth $5,000 that can be coupled with the federal rebate of up to $5,0000. Quebecors can qualify for up to $12,000 in EV rebates when they combine the provincial and federal programs.

    “While manufacturers have backed off incentives, the governments have not,” Karwel told Automotive News Canada. “If you’re simply looking for bang for your buck, there’s never been a better time to buy an EV.”

    Subaru also set a record for the month with 6,039 sales. The automaker said it was the third-highest number of vehicles sold in any month ever.

    The Crosstrek, Subaru's compact crossover, had another record month with 2,839 units sold, an increase of 94.6 per cent over July 2020.

    "We've been very pleased with our strong sales performance,” Subaru Canada CEO Yasushi Enami said in a statement  “As we come to the end of summer, we will maintain our momentum.”

    Volvo also posted gains in July, with sales up nine per cent to 1,103.

    Hyundai sales, including the Genesis luxury line, fell 5.6 per cent to 12,638, although Genesis sales surged 356 per cent to 524 units.

    Kia sales were essentially flat, up just five units to 8,305.

    Mazda sales fell 10 per cent to 6,340 sales.

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