Blogs & Comment

Chart: Automotive sector still not doing so well

It's seen worse days, but the automotive sector, often considered one of the barometers of a healthy economy, isn't exactly booming either.

New motor vehicle sales are one of the barometers of a healthy economy. A rise in vehicle sales indicates that consumers and companies have the both the ability and confidence to commit to a major expenditure. Also, the new vehicle sector is a huge component of the Canadian economy. About 7.4% of all manufacturing in September 2011 was for new vehicles, and new car dealers recorded over 17% of August 2011 retail sales. The graph below shows that buyers seem to be in a bit of a holding pattern. During the pre-recession days of 2007, an average of 141,100 new vehicles were purchased each month. During the first part of 2008, this average declined very slowly, but then fell off a cliff in the last couple of months of the year to a low of just over 110,000 vehicles in December. In 2009, there was recovery from the lows of late 2008, but average monthly sales declined to 123,600 units. Since then, we’ve recovered with average sales of 131,600 units in 2010 and 133,700 units for the first nine months of 2011. However, other than one month of flirtation above the 140,000 units per month number in 2011, volumes have been relatively flat.