Vehicles on the assembly line at Ford Motor Co. of Canada’s Oakville, Ont., assembly plant.FRED LUM/The Globe and Mail
Vehicle sales maintained their torrid pace in Canada last month – heading for a record year – and continued their robust recovery in the U.S. market.
Deliveries rose 13 per cent to 167,919 in Canada in September from 149,092 a year earlier, buoyed in part by generous incentives from auto makers trying to clear out the 2014 models before the bulk of the 2015 vehicles arrive in dealers' showrooms.
The 13-per-cent gain was the biggest percentage jump in any month in 2014, which is on pace to shatter the record sales level of 1.73 million set last year.
The September sales level hit two million vehicles on a seasonally adjusted annual rate basis for the first time, according to data compiled by DesRosiers Automotive Consultants Inc. It was also the sixth straight monthly record.
"The numbers are eye-popping, stunning," said Dennis DesRosiers, president of the firm. "We expected sales to be very good [this year] but not this good."
In the United States, auto makers reported their strongest September sales levels since 2004 with the seasonally adjust annual sales rate topping the 16 million mark for the seventh straight month in 2014.
But some observers are noting that the U.S. recovery may be starting to ease as pent-up demand from the 2008-2009 recession begins to peter out.
"We are certainly reaching a point where the rate of growth in industry sales is beginning to moderate," Emily Kolinski Morris, chief economist of Ford Motor Co., said during that company's monthly conference call with reporters and analysts. "So we are getting closer to what would be a likely plateau in terms of the industry sales pace."
Ford's U.S. sales fell slightly last month, while those of its cross-town rivals Chrysler Group LLC and General Motors Co., each rose 19 per cent.
There appears to be no sign of a plateau in Canada as 10 companies reported double-digit sales increases and several reported that their sales hit September records.
The biggest gains were racked up by Audi Canada and Mitsubishi Motor Sales of Canada Ltd., both of which posted increases of more than 40 per cent.
Ford Motor Co. of Canada Ltd. topped the sales rankings last month and jumped back into top spot in the annual sales race by posting a 5-per-cent rise. Ford stands about 3,400 vehicles ahead of Chrysler Canada Inc., which posted a 20 per cent surge that represented its 58th consecutive year-over-year increase.
Both those companies were outdone in September on a percentage basis, however, by General Motors of Canada Ltd., whose sales surged 34 per cent to 24,555.
Those three companies were among the most aggressive with incentives last month.
Ford's employee pricing campaign – which runs through most of the summer – ended last month, while GM was offering seven-year, interest-free loans on most of its 2014 models.
Chrysler offered various president's sales and other campaigns throughout the month.
But Mr. DesRosiers observed that incentives have been higher during previous Septembers, so they only explain part of the record performance.
It's not clear what other factors are underpinning the strong sales, he said, given that many economic indicators are tepid.
It could be, he pointed out, that consumers are listening to economists and others who are pointing to higher interest rates and buying new vehicles while rates are at record low levels.