Car sales nationwide spiked last month and could be on track for the best sales year since 2007, according to a report by BMO Economics.
Canadian auto and light truck sales increased 4.7 per cent this July over last.
To date, more than 1 million units have been sold in 2012, a 6.7-per-cent increase over last year. The annual record for Canadian car sales of 1.73 million was set in 2002.
“Every month this year, except April, sales have been higher than a year ago,” said Sal Guatieri, senior economist for BMO Capital Markets. “While most other areas of consumer credit have slowed, auto financing remains strong because of aggressive incentives by dealers. Steady job growth in Canada this year has also played a role.”
Ryan McVeigh with Marv Jones Honda said sales have been strong as of late at the local dealership thanks to falling prices.
Honda is offering its 2012 line at a lower price than its 2011 line, thanks in part to cheaper manufacturing costs.
“People who might have been in the market for a used car that one or two years old are going for new one instead,” said McVeigh.
“Every year it’s getting cheaper to produce cars. A GPS navigation system would have cost $4,000 10 years ago. Today it’s $1,500, and its voice activated.”
Honda has also rebounded from inventory shortages suffered last year after flooding in Thailand disrupted the car manufacturer’s supply chain, causing delays of two to three months for cars to arrive. This year, Honda introduced two new redesigned lines of cars, with the CR-V and the Civic all-new for 2012.
Meanwhile, Maple Ridge Hyundai in Albion is undergoing a dramatic renovation, and plans to nearly double its staff from 28 to 40 or 50.
Among car manufacturers, Toyota led the way in July with a 31 per cent increase in sales over last year, while Chrysler saw a 3.4 per cent increase.
Ford saw a sales increase of 2.2 per cent.
Continued low interest rates are also making it easy to finance a new vehicle.
However, Guatieri said he expects Canadian auto sales to slow in the year ahead as a result of elevated household debt.
Robert Sadokierski, head of dealership financing for BMO, expects auto manufacturers will continue to offer more incentives for consumers.
“There is good news for prospective buyers,” he said.