Healthy Forecast for Canadian Auto Industry

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Healthy Forecast for Canadian Auto Industry

Wednesday, 28 May 2008

Toronto -- May 28, 2008 -- The auto collision repair industry can breathe a sigh of relief today as reports of a strong Canadian auto market have been released.

According to the latest Global Auto Report released by Scotia Economics, Canadian vehicle sales have increased six per cent each year, setting pace for an annualized increase of 1.78 million units through April and four per cent above the record set in 2002.

"The strength reflects improved vehicle affordability, as automakers have lowered new vehicle prices to bring them more in line with U.S. prices, as well as ongoing employment gains," said Carlos Gomes, Scotiabank Senior Economist and Auto Industry Specialist.

According to Statistics Canada, new vehicle prices have declined by nearly seven per cent over the past year, reflecting lower prices by automakers as well as this year's one percentage point reduction in the GST.

The recent increase in crude oil prices has been affecting the automotive sales industry, among many other industries, especially in the U.S. The report points out that the United States accounted for almost all of the weakened vehicle sales, with passenger vehicle sales dropping to an annualized 14.4 million units, down from 16.1 million units in 2007.

The Canadian automobile industry need not worry about a decline in vehicle sales and subsequent affect for the collision repair industry – for now.

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