Auto sales up in Canada: PwC/DesRosiers report

Canadian auto dealers are reporting an estimated 12 percent market increase in 2010, and solid profits are expected to continue in the next decade, according to the recently released 2010 Trendsetter Survey. The annual survey of new Canadian car dealers is conducted by PwC, DesRosiers Automotive Consultants Inc. and Seguin Advisory Services.

Dealers reported new vehicle sales for 2010 were up nine percent, and they expect the market to increase seven to eight percent in 2011. In 2010, small market dealers reported a 20 percent increase in sales compared to only a three percent increase for large market dealers that sell more than 1,000 units per year. In addition, dealers are optimistic about future sales volumes of alternate fuelled vehicles, forecasting consumers will buy 14 percent more vehicles this decade than last.

"Auto manufacturers are getting their groove back and more consumers are buying new vehicles, which are two positive factors impacting Canadian car dealers," said Terri McKinnon a partner in PwC’s automotive practice. "The industry saw an overall recovery in sales, but more importantly, profitability is also increasing, which indicates measures taken by dealers during the downturn are paying dividends."

Dealers believe Canadian consumers aren’t buying into alternative fuel vehicles. In fact, the survey forecasts conventional gas vehicles will still account for 96 percent of light-vehicle sales this decade. However, most are optimistic about diesel-powered products, and believe that gas-electric hybrids will break through this decade and more than quadruple in sales. At the same time, dealers don’t see plug-in electric as the vehicle of choice for the coming decade, predicting only 50,000 will be bought over the next 10 years.

The survey reveals that Ford has landed the top spot as the "best positioned" brand in the market from Toyota/Lexus, which has fallen to third place. GM made the biggest jump, moving to second place from eighth place in 2009.

"The shake up in rankings is in part explained by the product recalls that plagued Toyota throughout 2010, which explains their drop to third place," said Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. "For GM, dealer consolidation has appeared to be paying dividends, given the company’s sharp rise to second place."

For more information, visit www.pwc.com/ca/trendsetter.