Canadian vehicle sales will be flat in 2016 as weakness in commodity-producing provinces is offset by strength in the industrial heartland, according to a new report from Scotiabank.
Unless economic growth falls below last year’s one-per-cent pace, the bank expects passenger vehicle sales to remain on par with 2015 volumes, which hit a record 1.9 million units.
This is going to be driven by ongoing sales gains in Ontario, Quebec and British Columbia – the 3 provinces that will benefit most from export growth resulting from the weak loonie, according to Scotiabank’s global auto report.
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On sleep issues of the equation is Alberta, which saw sales slump 12 per cent this past year amid falling oil prices and a weak labour market. Scotiabank expects Alberta vehicle sales to say no by another seven per cent in 2016.
“Stronger employment growth and business activities in the export-reliant manufacturing provinces will lift volumes in these markets, but deteriorating fundamentals and weakening demographic and income trends will pressure volumes in other regions,” wrote Carlos Gomes, Scotiabank’s senior economist and auto industry specialist.
