By Blair Qualey
After navigating a rocky road through the pandemic and post-pandemic, February 2024 stands tall as a perfect encapsulation of the state of the automotive industry in Canada — and things are looking good. The results are in, and light vehicle sales of more than 129,000 shattered records, making February 2024 a record-breaking month that saw a whopping 24.4% increase over February 2023.
Pent-up demand for new vehicles and a sorely missed sense of financial freedom following the COVID-19 pandemic tell a tale of recovery and the remarkable adaptability of the automotive industry. One cannot overlook the role of demand stemming from the “lost sales” of the past four years, but despite Canada grappling with a recession throughout the past year, the market has achieved an impressive 16 consecutive months of year-over-year growth.
The Seasonally Adjusted Annual Rate (SAAR) for February hit 2.11 million units, a peak not witnessed since January 2018. The Canadian automotive market has not only weathered the storms of recent times but has emerged stronger than ever — especially for the month of February.
Andrew King, Managing Partner of the New Car Dealers Association of Canada (DAC), captures the essence of the moment, stating, “February 2024 sales tell us that some of the hurdles of recent years – and specifically the supply constraints of new vehicles – are now well and truly in the rear-view mirror.”
The pandemic had created supply issues both through plant shutdowns and a surge in demand for electronics that led the auto industry to have a shortfall of semiconductors. The disruptions led to a shortage of supply and a surge in pricing as automakers focused on their priciest and most profitable models. However, production is expected to finally return to pre-pandemic levels this year.
As we head into the traditional spring sales season, it comes with the anticipation of whether this trend will continue to grow. While a record-breaking February is certainly auspicious, the next few months will require a close eye to accurately gauge just how long pent-up demand can remain the dominant market dynamic — especially in the face of rising vehicle prices, inflation, and high-interest rates. The spring season will also provide valuable insights into the long-term stability of this resurgence and our industry’s ability to navigate ever evolving and unpredictable economic landscapes.
Even amidst a per capita recession, Canadians’ appetite for automobiles remains strong, proving that the automotive sector is not just a market but a resilient cornerstone of our economy. The economic world isn’t the same as it was before the pandemic, and the automotive industry’s ability to turn challenges into opportunities is more important than ever.
As we celebrate the most recent sales results, we look ahead with optimism, knowing that the automotive industry, a fundamental pillar of Canadian economic vitality, is well-equipped to navigate the road ahead.
Speaking of post-pandemic celebrations, we’re on the homestretch leading up to the Vancouver International Auto Show, happening on March 20-24 at the Vancouver Convention Centre! For more on the show, including ticket information, please head to: www.VancouverInternationalAutoShow.com.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected].
