Luxury brands were the big winners in August for automakers that still report monthly sales.
Acura, Genesis, Lexus and Volvo all posted gains last month while Subaru was the only mainstream brand to do the same.
Lexus led the way by volume, selling 2,508 vehicles, up 28 per cent over the same month a year ago.
August marked the sixth consecutive month of record sales for Toyota Canada’s Lexus division.
Genesis was the biggest gainer by percentage, up 416 per cent to 526 units when compared with August 2020.
Acura sales were up 5.6 per cent to 1,555 units while Volvo increased sales by the same percentage, to 1,100 vehicles.
Rebekah Young, the director of fiscal and provincial economics with a focus on automotive retail at Scotiabank Economics, says there are plenty of reasons why luxury names are hot sellers.
“I think the biggest driver is the so-called wealth-effect: Anyone with a good job and some equity (housing or financial markets) has seen their net worth increase quite substantially over the course of the pandemic,” she said in an email to Automotive News Canada. “Furthermore, we’ve seen household savings increase quite substantially across all income brackets. With limited other discretionary spending in categories like travel, restaurants, etc. until recently, there is probably more discretionary spending directed to goods like luxury vehicles.
“Finally, the proposed luxury auto sales tax is scheduled to come into effect in January 2022 pending consultations, election outcomes, etc. so there could very well be some pull-forward in purchases ahead of this potential tax.”
The federal government announced in its April budget that, effective Jan. 1, 2022, vehicles $100,000 and more will be levied with a luxury tax of up to 10 per cent depending on the purchase price. Boats and aircraft priced at $250,000 are also affected.
Ottawa opened public consultations Aug. 10 and the country’s auto industry can still have its say as federal party leaders campaign ahead of the Sept. 20 election. Stakeholders have until Sept. 30 to submit their thoughts.
While luxury sales boomed, the vast majority of mainstream brands saw their sales sink. Subaru was the only gainer. The Japanese automaker marked a record August with 5,853 units retailed, up 11 per cent from the same time last year.
The Crosstrek remained the best-selling model in the lineup. Sales were up 86.5 per cent to 2,568.
Overall, total Canadian sales were down an estimated 11.4 per cent to 146,925, according to DesRosiers Automotive Consultants. Monthly sales are an estimate now that so many have turned to quarterly reporting.
Additionally, sales were “down a disconcerting 19.2 per cent from August 2019,” DesRosiers said in a statement.
The seasonally adjusted annual sales rate for August fell to1.62 million, the second lowest rate in 2021.
DAC said that with the semiconductor issues forecast to persist through the remainder of the year the sales outlook remains questionable.