Canadian Auto Sales Dropped

Anthony Fontanelle
December 6, 2007

For the past five years, Canadian auto sales have risen considerably. The increasing value of the Canadian dollar has led to consumers being able to afford new vehicles. But last month, the month after month increase in sales came to a grinding halt. According to figures provided by the Toronto Star, last month's auto sales has dropped by five percent compared to auto sales for the same month last year. This is in the face of sweet deals being offered by manufacturers.

The decline in the number of vehicles sold last month compared to last year is expected to offer more incentives to consumers especially with the Holiday Season just around the corner. According to analysts, consumers, despite the incentives offered by automakers are still waiting for even better deals. This is because Canadians are finding it easier to buy vehicles in the United States and bringing them across the border. With the Canadian dollar increasing in value compared to the United States dollar, Canadian consumers can save thousands of dollars if they purchase vehicles across the border especially if they buy luxury vehicles.

With the demand for new vehicles in Canada decreasing as a result of a five-year steady increase, automakers have anticipated the decline in sales. Last month, they have already offered holiday incentives such as no downpayment plans, a 1 percent cut in the federal goods and services tax as well as cash back deals. But consumers are more than willing to just wait for the deals to become even better.

Dennis DesRosiers, an industry analyst, pointed out the patience of Canadian consumers according to the Toronto Star saying: "There is an interesting consumer psychology in play. When prices drop drastically, like they did in response to our above-par dollar, consumers will often sit on their hands and wait for prices to fall even further."

DesRosiers also pointed out that the decline in November auto sales may not actually reflect the real number of new vehicles bought by Canadian consumers. He said that more and more Canadians are now opting to purchase new vehicles and auto parts such as ABS speed sensor Canada across the border due to the savings that they can avail of.

Although sales in Canada for the month of November has declined, total sales for the year is still on track to become the best-ever achievement for automakers in the country. From January to November, there have been about 1.53 million cars and light trucks purchased in Canada. That figure is 3 percent better than Canadian auto sales for the same period last year. It is expected that total sales for this year will top the 1.7 million mark achieved in Canada in 2002.

Source:  Amazines.com