Canadian auto sales in February were 3.7% lower than the prior year. The lower sales number is clearly not good news for the economy or for AutoCanada. But it should be noted that February 2018 was “a tough comparable” month. February 2018 had been 2.0% higher than February 2017 and was a record high for February. Despite a weak finish, 2018 was still a strong year for auto sales in Canada. 2016 and 2017 had both been banner years with big increases compared to 2012 through 2015 which was a period when auto sales did not grow much at all. February 2019, despite the 3.7% drop was the third highest February ever. Therefore, there are still a lot of auto sales happening in Canada. If auto dealerships have historically been good profitable businesses most of the time (and they certainly appear to be) then well-managed auto dealerships should continue to be profitable in 2019. And, starting in March the comparable year sales are a little less tough as 2018 sales were about flat compared to 2017 in March and then started to run increasingly below.
One piece of good news for AutoCanada was that Chrysler sales with a 2.0% decrease in February were down less than the industry average. This comes after a long string of big monthly declines for Chrysler. Chrysler (including Fiat) is actually the top selling brand in Canada. AutoCanada has a heavy exposure to Chrysler dealerships.
It’s interesting to see that “light trucks” which include SUVs absolutely dominate the market with a 75% market share in the first two months of 2019 up from 72% in 2018. This might suggest that people are still not choosing the cheapest economy vehicles.