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Customer LoginsCanadian light-vehicle sales up 2.5%, Ford holds YTD sales lead
Canadian market sales through November 2016 reflect a year to date (YTD) gain of 2.5%, as the market has cooled compared with first-half results. Like the United States, car sales are struggling while sport utility vehicle (SUV) and truck sales flourish and crossover sport utility vehicles (C-SUVs) are now the most popular segment, according to IHS Automotive data.
IHS Markit Perspective
- Significance: As 2016 winds to a close, Canadian light-vehicle sales are up 2.5% from January through November - compared with a gain of 5.4% at the half-way mark, both compared with the same periods of 2015. Although November sales returned to a positive mark, the market is cooling, with each month in the third quarter reflecting year over year (y/y) declines. With a year to date (YTD) sales gain of 10.0%, Ford has overtaken FCA as the top-selling automaker. Segmentally, C-SUVs have cemented the lead over the C-Car segment as the most popular in the market.
- Implications: Not unlike the United States, passenger-car sales are struggling in the face of falling fuel prices and increased competition from a more diversified light truck market, impacted by the expanded market for subcompact and compact crossovers. YTD, passenger cars have captured only 34.8% of the market, dropping a further 0.4% share in October and November.
- Outlook: Through November 2016, the pace of growth has continued to cool, although November sales returned a strong 10.0% gain. Light commercial vehicle (LCV) sales are gaining while car sales are under pressure. LCV sales are up 9.2% through November, while passenger-car sales declined 8.0%. Total sales for the first eleven months have reached 1,823,646 units. With the performance of recent months, IHS Automotive forecasts full-year 2016 sales will reflect 2.7% growth to 1.949 million units - although the surge will be followed by contractions in sales for several years.
Canadian sales in 2015 had a modest growth pace of 2.6%, while the first half of 2016 delivered a stronger environment. Through June 2016, sales were up 5.4%. However, sales pace largely cooled since then. Despite a 10.0% increase in November 2016 sales year on year (y/y), the year to date (YTD) total is up only 2.5%. Light commercial vehicle (LCV) sales continue to outperform passenger cars, and are up by 9.2% YTD while passenger-car sales have declined 8.0%. Light-vehicle sales in Canada surpassed 1.76 million units in 2013, edged past 1.85 million in 2014, and reached 1.89 million units in 2015. The pace for 2016 has the stage set for another year of growth and another record.
For the full year 2015, the most popular segment in Canada remained the C-car segment, followed by the crossover sport utility vehicle (C-SUV) segment. While that remained true over the first six months of 2016, by the end of September, the C-SUV segment had pulled ahead. By end of November, the gap increased to more than 15,000 units. Between January and November 2016, Canadian market sales of C-Cars reached 351,457 units, compared with 366,822 C-SUVs. C-SUVs now claim 20.1% market share, compared with 19.3% for the C-Car segment. The C-car and C-SUV segments' combined share of market sales over the first eleven months of 2016 is 39.4%, compared with 40.0% the first eleven months of 2015.
The Canadian market, however, continues to be dominated by sales of vehicles in the D size segment, rather than the C segment. While throughout the year, aggregate D sales are volatile, the class is up 2.4% through November. Over the first eleven months of 2016, D segment vehicle sales have reached 791,912 units, while C segments lags slightly at 765,720 units. Additionally, the larger D size class has widened its lead over the C segment in 2016. From January through November 2015, D vehicles outsold C by 17,652 units; in 2016, the D segment is ahead by 26,192 units. D segment demand is driven by D segment pickups (Ford F-150 is a top-selling vehicle in Canada as well as the United States, and the second-best-selling product is the Ram 1500; the D Pickup segment is up 7.0% YTD) and demand for D segment sport utility vehicles (SUVs), which has grown by 2.6%. The C and D segments account for 85.4% of Canada's sales through November.
In terms of manufacturers, Ford has overtaken Fiat for top-selling honours, although at the six-month mark, Fiat was still in the lead (by 2,967 units). Ford outsold Fiat from March to November. Throughout November, Ford has been able to grow its lead over FCA to more than 25,000 units. General Motors (GM) is solidly in third. Ford easily holds the top-selling light-vehicle nameplate with the F-Series (135,422 units, up 23.7% YTD). The second best-selling model for Ford is the Escape (43,690 units, down 2.0%), with the Edge in third (19,435 units up 21.0%). Fiat Chrysler Automobiles' lead product continues to be the Ram 1500, although sales are down 5.0% over the first eleven months of 2016 to 67,526 units - less than half of Ford's F-150 sales. The Dodge Caravan is the company's second-strongest product, up 11.9% to 47,869 units sold so far in 2016. Ultimately, the Caravan will be replaced by the Pacifica, but popularity of the vehicle in Canada will keep the Dodge in production for quite some time. GM also sold more pick-ups than any other models, with the GMC Sierra its top-seller at 48,356 units through November, a 3.6% decline; Sierra sales have been slowing, as it was down only by 0.1% at the halfway mark. The Chevrolet Silverado sold 42,481 units so far in 2016, down 1.6% compared to the first eleven months of 2015. Although Cruze sales have declined 20.5% in January through November, it is GM's third-best seller, followed by the Equinox. Cruze performance has seen some improvement, as inventory of the latest model arrives. Toyota holds fourth among automakers. Fourth-place Toyota has sold more RAV4 sport utility vehicle (SUVs) (46,103 units, up 17.3%) in 2016, followed by the Corolla (43,411 units, down 4.0%). Hyundai's strongest seller in Canada remains the Elantra, followed by the Santa Fe Sport Tucson, and Accent, on a YTD basis. Honda continues to look at the top-five club from the outside, although it has increased sales by 9.5% through September 2016.
Outlook and implications
After coming in strong over the first six months of 2016, each month of the third quarter saw demand fall. As a result, the market is up a more modest 2.5% through November 2016, compared with 5.4% at the halfway mark. As true in several worldwide markets, LCV sales are gaining while car sales are under pressure. LCV sales are up 9.2% through November, while passenger-car sales declined 8.0%. Total sales for the first half have reached 1,823,646 units. IHS Automotive forecasts full-year 2016 sales will reflect 2.7% growth to 1.949 million units - although the surge will be followed by contractions in sales for several years.
As in many other markets, passenger-car sales are struggling in the face of falling fuel prices and increased competition from a more diversified light truck market, impacted by the expanded market for subcompact and compact crossovers. Light truck sales have posted robust YTD growth across all sizes, although compact light trucks have the strongest growth as freshened compact models draw share from both passenger cars and from existing light-truck segments. Luxury also remains a driver of market growth, and sales are on pace to capture 10.5% of the market in 2016. Overall luxury sales surged 13.4% in 2015, compared with a market up 2.7%. Consumers are responding well to expanding original equipment manufacturer (OEM) product lineups, as manufacturers attempt to move down market in terms of vehicles size and price, as well as into light utilities. Divergent from mainstream segments, however, luxury sales are strong in both passenger cars and light trucks.
After growth in 2016, IHS Automotive forecasts registrations to decline as the market will have set records in 2014, 2015, and again in 2016. Between 2017 and 2023, we anticipate registrations to hover between 1.87 million units and 1.90 million units. Although another record will be set in 2016, it is now becoming obvious that the pace of growth is slowing from 5% y/y gains in 2013 and 2014 to sub-4% growth in 2015 and less than 3% growth expected in 2016. Over the course of the forecast, economic fundamentals will continue to drive consumers' return to the market. Eventually, traditional replacement demand will become the principal driver of the market, replacing the credit-fueled growth driven by the accommodative policies coming from the Bank of Canada. Given that Canada is already a mature market, expansion will continue to slow as population and wage growth limit market potential.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.