Canadian auto sales kept up their hot pace in March, growing by 9.3 per cent from a year ago to the best March on record, according to figures from DesRosiers Automotive Reports.
Canadians bought 175,142 light vehicles in the month, including 113,413 light trucks.
All the Detroit automakers were ahead:
- Ford sold 23.7 per cent more vehicles at 26,432.
- FCA (Chrysler) sold 3.2 per cent more vehicles at 25,862.
- General Motors sold 16.5 per cent more vehicles at 24,498.
Toyota also had a strong month, with sales picking up 15.1 per cent to 17,264. The automakers said March sales of TCI hybrid vehicles were up 85.2 per cent compared to last year, with 1,741 units sold.
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Ford, Honda, Fiat Chrysler and Nissan all reported big sales increases, largely driven by SUVs and trucks. General Motors, which has been cutting back on sales to rental car companies, saw a slight sales increase and said its retail sales to individual buyers rose 6 per cent.
But Toyota sales fell nearly 3 per cent as rising SUV and truck sales couldn't overcome car sales that fell almost 10 per cent. And Volkswagen, still mired in an emissions cheating scandal, saw its sales tumble 10.4 per cent.
Yet the overall sales increase, expected to be around 7 per cent, showed that Americans are still buying in big numbers, despite predictions by some analysts and dealers that sales have peaked.
The increases showed that Americans are still buying cars and trucks in big numbers, despite predictions by some analysts and dealers that sales have peaked.
Mustafa Mohatarem, GM's chief economist, said the U.S. economy remains strong, and that should help auto sales to continue to lead the recovery from recession.
"We expect historically low interest rates, strong employment, rising wages and stable fuel prices to continue for the foreseeable future," Mohatarem said in a statement.
Nissan sales were up 13 per cent, hitting a record for any month in its history. At Fiat Chrysler and Ford, sales were up 8 per cent, while they grew 0.9 per cent at General Motors. Ford and Fiat Chrysler posted their best March numbers in a decade.
Kelley Blue Book says sales should total around 1.66 million cars and trucks for the month, which could be the biggest number for any month since July of 2005.
Relatively low gas prices, sweet lease deals, low interest rates, easy-to-get loans and an aging fleet of cars are driving the increase.
Some signs of trouble
But some analysts say there are troubling signs for automakers beneath the numbers. Last month had two more selling days than a year ago, and spending on discounts is on the rise. Also increasing are low-profit sales to rental car companies, which some automakers use to boost their numbers.
Discount spending, while good for new-car buyers, cuts profits and hurts used car values. High incentive spending is one of the factors that led to the industry's financial troubles in 2008. The auto pricing site TrueCar.com said automakers averaged just over $3,000 in discounts per vehicle in March, up more than 10 per cent from a year ago.
The increase comes mainly because automakers are having trouble selling cars as the U.S. market shifts to trucks and SUVs, according to J.D. Power and Associates. Discounted cars can push down used car values so buyers have less to trade in, said Thomas King, a J.D. Power vice-president.
"Significant declines in the value of used cars would disrupt consumers' ability to buy new vehicles," King said in a statement.
Incentive spending last month rose toward recession-era levels, King said. Discounts on cars grew to 12.3 per cent of the manufacturer's sticker price last month, but truck and SUV discounts stayed stable at 8.2 per cent.
At Fiat Chrysler, car sales fell 34 per cent for the month, but truck and SUV sales rose 23 per cent. The company sold 34,780 cars and 178,407 SUVs.
Some analysts have predicted that U.S. auto sales will reach a peak this year, but Jeff Schuster, senior vice-president of forecasting for the LMC Automotive consulting firm, said the March numbers show there's still room for growth.
"We're not necessarily seeing weakness," he said. "We're just seeing slower growth."
LMC is forecasting sales of 17.8 million vehicles this year, up 1.9 per cent from the 2015 record of 17.5 million. Last year sales grew by nearly 6 per cent over 2014.