Alberta and the Canadian Prairies are expected to drive vehicle sales in Canada to record sales this year, according to a new report by Scotiabank.
While every region saw higher sales last year — including six provinces reporting record volumes — economists believe Alberta will be the one to lead growth in Canada's auto industry in 2014.
After a tough few years, the Global Auto Report is suggesting car manufacturers are on a roll.
Top 5 light trucks sold in 2013
- Ford F-series (122,325 units)
- Ram pickup (78,793 units)
- GMC Sierra (46,908 units)
- Dodge Caravan (46,732 units)
- Ford Escape (45,141 units)
Source: DeRosiers Automotive Reports, Market Snapshot.
"New vehicle affordability in Canada is at the best level in two decades, partly linked to manufacturer incentives, and consumer confidence is expected to strengthen as the pace of job creation picks up," said Carlos Gomes, senior economist and auto industry specialist at Scotiabank.
"We expect purchases to climb to a record 1.76 million units in 2014, bolstered by a strengthening global economy and continued low interest rates."
Last year, Canadian passenger vehicle sales climbed to a record 1.74 million units — a four per cent increase over the previous year.
Vehicle sales in Alberta climbed to a record 257,000 units in 2013 — a three per cent increase from the pre-recession high of 249,000 units.
Economists are forecasting numbers to reach 262,000 units this year.
Energy investments among drivers of strength
Driving those numbers are the region's strong labour market, record population growth and ongoing energy sector investments.
Population growth is at a 30-year high, with the rate of growth roughly four times that of the rest of Canada.
With a median age of 36, the province's population if four years younger than the national average.
It also leads in light truck sales, with those models making up 75 per cent of vehicle sales in the province — and 20 per cent of national light truck sales.
In the lucrative pickup truck segment, Alberta also makes up 30 per cent of overall sales.
Strong harvest pushes up Prairie sales
Growth is also expected to outpace the rest of Canada across the Prairies.
- Record crop yields in Prairies pushing grain prices down
- Sask. grain farmers expect near-record harvest
Saskatchewan vehicle purchases climbed to a record of 58,000 units last year and are expected to near 60,000 this year.
In Manitoba, the 20-year high of 54,000 units is expected to hit 56,000 within the next year or two.
Record harvests helped boost sales in those provinces, as did economic growth in Manitoba due to strong exports and several construction projects.
British Columbia saw 180,000 units sold last year and economists expect that to hit 182,000 as export prospects improve related to forestry and mining.
Eastern Canada sees ups, downs
Ontario sales gut 646,000 units in 2014 but economists predict growth this year will be in fleet purchases rather than household purchases, as the dropping Canadian dollar could improve export performance and increase corporate profits.
The report suggest Quebec under-performed last year, with volumes flat at 415,000 units, but is expected to see slight growth to 416,000 units in 2014.
Nova Scotia sales surged eight per cent to a record 52,000 units last year and are expected to remain strong due to consumer confidence as the federal shipbuilding contract starts in 2015.
Newfoundland and Labrador also saw passenger vehicle sales increase to 35,000 units last year.
Income gains are expected to keep vehicle sales steady in that province despite a slowdown in the economy there.
Read the full Global Auto Report below.