New-vehicle sales in Canada fell to just 128,419 units in October, as estimated by DesRosiers Automotive Consultants (DAC), the lowest tally for the month since 2011. That total was down 17.7% from the same month a year ago, making it the second-greatest monthly percentage drop in 2021—behind September’s 19.6% decline—and it was down 19.8% from October 2019’s pre-pandemic level.
Estimated year-to-date sales of 1,425,031 vehicles were up 9.5% from the same period in 2020, thanks to strong performance earlier this year, but they remained 14.2% below 2019 levels.
The current situation is reflected in the SAAR (Seasonally Adjusted Annualized Sales Rate) for the month, which was a “limp” 1.57-million, according to DAC—only slightly improved from September and well below the pre-pandemic 1.9-million norm.
While the majority of automakers saw double digit drops in sales from a year ago, according to DAC’s estimates, a few with vehicles available to sell made significant gains.
As a whole, however, the market continued to be constrained by ongoing supply chain problems in October, across a wide range of manufacturers and their suppliers. While semiconductor chips remain in short supply, other component shortages and shipping issues are also taking a toll, resulting in production interruptions and massive vehicle inventory declines.
According to Rebekah Young of Scotiabank Economics, “fundamental demand-side factors remain largely intact, if not robust.” Consumer confidence improved by three points in October, back to July levels, after two months of decline. A ramped-up rate of inflation is impacting consumer confidence over future finances, however.
All these factors considered, Scotiabank is maintaining its 2021 sales forecast at 1.67-million units, with an expected improvement only to 1.80-million in 2022. While shortages will fuel pent-up demand, notes Young, production capacity will probably limit the ability to achieve more in 2022. Consequently, she expects growth to continue into 2023, when sales are expected to reach 1.93 million units.
Winners and losers
As has been the case for the past several months, there were significant disparities in sales among manufacturers in October, relative to their traditional performance. For that reason, year-to-date sales may be a more relevant overall measure of each automaker’s performance—particularly when compared to pre-pandemic 2019 figures.
Given that many automakers continue to report sales only quarterly rather than monthly, a complete breakdown of results won’t be available until year-end.
Of those that did report October results, Genesis once again showed the greatest percentage gains for the year-to-date (YTD), with sales up 188.7% from 2019 and 322.2% from 2020.
Volvo was next best, with sales up 13.6% relative to 2019 and 30.9% from 2020, while Kia improved by 8.2% from 2019 and 17.0% from 2020.
Lexus and Subaru were the only other reporting brands to improve sales from 2019. Lexus sales were up 6.6% from 2019 and 32.4% from 2020, while Subaru’s sales improved by 5.9% and 22.0% from those two years, respectively.
Mazda came close to its 2019 performance with just a 0.3% sales decline, and a 22.0% gain over 2020.
Honda was the biggest decliner from 2019 with sales down by 24.3%, although they were still 4.4% ahead of their 2020 level, while Acura’s sales were down 14.9% from 2019 but up 18.5% from 2020.
Among the other reporting brands, Toyota’s YTD sales were down by 3.7% relative to 2019 but up 22.0% from 2020, while Hyundai’s were off 4.5% from 2019 and up 15.3% from 2020.
We’ll have detailed numbers for all manufacturers after the year-end.
