An influx of new immigrants and demand from consumers who couldn’t get cars during the COVID-19 pandemic are helping automotive sales stay resilient in Canada. Receipts at car dealers grew by one percent in March compared to the previous year. The subsector saw the largest increase in retail sales and was up for a second straight month, according to Statistics Canada data.
Canada’s population surged by 1.3 million last year, contributing to the growth in the consumer base and boosting retail sales, including in the automotive sector. However, when sales are adjusted for population growth on a per-capita basis, more significant weaknesses in consumer spending trends and the broader economy become apparent.
As pent-up demand subsides and supply chain issues improve, vehicle sales are gradually returning to normal. Andrew Foran, an economist at Toronto-Dominion Bank, expects that car sales will fully recover to pre-pandemic levels by 2025