A chaotic disruption in new vehicle sales in Canada intensified through the third quarter of 2021, with September sales dropping to the lowest monthly SAAR (Seasonally Adjusted Annualized Sales Rate) since May of 2020—about 1.55-million, based on DesRosiers Automotive Consultants (DAC) figures.
While the direct effects of the COVID-19 pandemic may still be impacting sales in some parts of the country, the biggest issues are on the supply side, not the demand side. Both production and inventories have been dramatically depleted throughout the industry, primarily because of a global microchip shortage, along with delivery issues for other key supplies.
The net result was 439,166 new vehicle sales in Canada in Q3—a decline of 12.3% from the same period in 2020 and 15.9% from 2019.
While cumulative sales through the first half-year were up more than 50% from a year ago, now at the three-quarter point they’re up just 13.2% from last year’s pandemic-ravaged numbers and they’re down 13.9% from the same period in 2019.
Unfortunately, there appears to be little relief in sight for the near term as temporary plant closures and production cutbacks continue.
“With the semiconductor issue clouded in uncertainty, and with widely ranging speculation as to its future depth and duration, we expect the market to remain unpredictable and volatile in the months ahead,” said DAC.
As for demand, Rebekah Young of Scotiabank Economics noted that “fundamental demand-side factors remain largely intact with July data (latest available) beating expectations across the board from job growth, to retail sales, to GDP.” However, “consumer confidence has weakened over August and September as fourth waves of COVID-19 unfolded across many parts of the country,” she added.
Given the industry’s current status and all these factors, Scotiabank has revised its 2021 sales forecast downward to 1.67-million units, with the expectation of increases to 1.80-million in 2022 and 1.93-million in 2023.
No change in light truck domination
While there was significant variation in the fortunes of individual manufacturers in Q3, the sales mix between passenger cars and “light trucks” (pickups, vans and utility vehicles, including crossovers) remained relatively unchanged, shifting a further 1.4% from cars toward trucks from a year ago.
Sales of 439,166 light trucks accounted for 80.7% of all new vehicle sales, representing a 12.5% decline from the same period in 2020, and 11.9% from 2019.
Sales of 90,064 passenger cars represented 19.3% of the market—a sales decline of 11.3% from 2020 and 29.5% from 2019.
Disruption not evenly distributed
The extent of the sales disruption through Q3 was not evenly distributed throughout the industry, with some automakers being affected more dramatically than others.
“Certain manufacturers have been hit hard by the semiconductor issue, whilst others have escaped (so far) relatively unscathed,” said Andrew King, Managing Partner at DAC.
Among those hardest hit were the Detroit Three.
Ford’s 62,707 sales in Q3 were down 25.4% from 2020, resulting in a 2.3% decline in market share (to 14.1%) for the year to date—the greatest decline in the industry. Its 182,725 cumulative sales were down just 3.0% from last year (-21.1% from 2019), however, reclaiming first place for Ford in overall sales, after General Motors held it through the first half.
Not far behind in second place for Q3 with 57,403 vehicles sold was—surprise!—Toyota, which was one of the brands least affected by the supply issues. Its Q3 sales were up 0.2% from 2020 and 0.8% from 2019, while year-to-date (YTD) sales of 163,491 units were up 30.1% from a year ago (-0.9% from 2019). That sales gain increased market share by 1.6% to 12.6%—the greatest share increase in the industry—giving Toyota a solid hold on third place in sales YTD.
Still in second overall but third for the quarter, General Motors’ 48,657 Q3 sales were down 23.1% from 2020 and 34.0% from 2019. Strong sales earlier in the year kept YTD sales of 178,120 units up 10.3% from 2020, though down 12.5% from 2019, while losing 0.4% of market share, to 13.7%.
Honda claimed fourth place in sales for the quarter with 39,270 vehicles sold—a decline of 6.2% from the same period last year and 16.9% from 2019. Year-to-date, Honda’s 103.900 sales were up 9.5% from 2020, though down 22.8% from 2019, dragging market share down by 0.3% to 8.0% and keeping the brand in fourth place overall.
Hyundai squeezed into fifth place in Q3, with 35,797 sales, a decline of 8.7% from 2020 and 6.4% from 2019. Year-to-date, it remained sixth with 98,097 units sold, up 18.4% from 2020 but down 4.9% from a very strong 2019, increasing market share by 0.4% to 7.6%.
Tough quarter for Stellantis
Stellantis was the biggest Q3 loser, in percentage terms, with just 35,717 sales—a 34.3% decline from the same period in 2020 and a 39.2% decline from 2019 that dropped the once third-place seller to sixth-place for the quarter. Cumulative sales of 122,284 units leave Stellantis fourth in YTD rankings, with its market share reduced by 2.1% to 9.4%.
Nissan maintained its seventh-place ranking—barely—for the quarter, with 25,290 sales, down 9.1% from 2020 and 20.9% from 2019. Cumulative sales of 74,970 units through Q3 were up 20.2% (but down 23.3% from 2019), improving year-over-year share by 0.4% to 5.8%.
Kia was just 33 units behind Nissan with 25,057 Q3 sales—a marginal decline of 0.1% from 2020 and a gain of 14.6% from 2019—maintaining eighth place for the period. YTD sales of 66,237 vehicles were 23.0% ahead of 2020 and up 10.3% from 2019, increasing Kia’s market share by 0.4% to 5.1%.
Volkswagen claimed ninth place in the Q3 rankings with 18,570 vehicles sold, an 11.2% improvement from 2020 and a 3.6% decline from 2019. VW remained 10th for the year-to-date, however, with a total of 46,980 sales, up 25.1% from 2020 but down 9.9% from 2019—resulting in a share increase of 0.3% to 3.6%.
Mazda dropped to 10th place in the rankings for the quarter with 17,867 sales, a 6.2% decline from 2020 and 5.4% from 2019. Year-to-date, however, Mazda’s sales were up 26.0% from 2020 and 2.0% from 2019, adding 0.4% of market share, to 4.0%, and maintaining ninth-place overall.
Not far behind in 11th, Subaru continued its hot streak with Q3 sales of 12,612 vehicles up 0.3% and 20.3% from 2020 and 2019 respectively, and YTD sales of 44,824 units up 25.5% and 6.6% from the same prior periods, resulting in a year-over-year share increase of 0.4%, to 3.4%.
Mercedes-Benz maintained its luxury-brand sales leadership in 12th place overall, followed by BMW, Lexus and Audi in that order for Q3, although Audi remained second among that group in YTD sales.
Winners and losers
The big “winners” for Q3 2021, in terms of percent change in sales from the same period in 2020, were: Genesis (370.0%); Maserati (40.8%); Mitsubishi (34.8%); Lexus (23.2%); and BMW (14.2%).
Relative to the more normal baseline of 2019, the big winners were: Genesis (267.5%); Volvo (25.7%); Maserati (24.3%); Lexus (21.8%); and Kia (14.6%).
The greatest “losers,” in terms of percent change from Q3 2020, were: Stellantis (-34.3%); Mini (-27.3%); Infiniti (-25.9%); Ford (-25.4%); and General Motors (-23.1).
Relative to the 2019 baseline, the big losers were Infiniti (-51.6%); Jaguar (-44.6%); Stellantis (-39.2%); Mini (-37.2%), and General Motors (-34.0%).
It should be noted that the sales figures reported here are reconciled quarterly by DesRosiers Automotive Consultants (DAC) based on sales reported by manufacturers.
