New Motor Vehicle Sales, June 2010 Release

Date: August 13, 2010

New Motor Vehicle Sales, June 2010 Release

Source: Statistics Canada

Link to Release: http://www.statcan.gc.ca/daily-quotidien/100813/dq100813a-eng.htm

Summary: Canadian new motor vehicle sales increased 2.5 per cent in June, to 130,135units. Truck sales (SUVs included) led the way, rising 3.2 per cent to 72,709 units. Passenger car sales also rose 1.6 per cent to 57,426 units. Sales improved in eight of ten provinces, including Ontario, where sales increased 1.4 per cent to 48,783 units. Statistics Canada also noted that preliminary figures for July suggest another one per cent increase in sales.

Analysis: The trend for new vehicle sales in Canada has generally been pointing upward since the beginning of 2009, albeit with some month-to-month volatility along the way. Motor vehicle sales are often taken as one indicator of consumer sentiment. The argument is that if an individual is confident in their financial situation (including employment prospects) moving forward, they will be confident in their ability either to make a large cash outlay on a vehicle or make regular payments on a vehicle loan over time without default. With this in mind, it seems reasonable to suggest that more Canadian households feel confident in their financial situation today than they did at the beginning of 2009. Added to this is the fact that increased vehicle sales also serve to reinforce the notion that the fortunes of auto makers have improved over the same period. This is especially important to southern Ontario, where many households still rely employment income related to the motor vehicle sector.

Source: Toronto Real Estate Board

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