January vehicle sales growth hit 15 year high

TORONTO — Canadian sales of new cars and trucks opened the year on a resoundingly positive note, but may have fallen off last month, Statistics Canada suggested Wednesday.

TORONTO — Canadian sales of new cars and trucks opened the year on a resoundingly positive note, but may have fallen off last month, Statistics Canada suggested Wednesday.

The federal agency — which collects data on monthly retail sales in dollars and in units of new vehicles sold in Canada — found a 15.4 per cent rise in vehicles sold in January to 153,623 units from 133,146 units sold in December.

The data indicates sales rose at the fastest pace in more than 15 years in January, economist Robert Kavcic said Wednesday in a report by BMO Economics.

And while sales are likely to dip in the short term, the industry is headed in the right direction, he said.

“January’s growth was largely the result of inventories becoming available after the auto-sector supply-chain was disrupted last year,” he said.

“Sales rose across the country, with Ontario and Quebec seeing the biggest increases.”

Japanese automakers were hit hard after last year’s earthquake and tsunami that hampered production.

Meanwhile, interest rates remain at ultra low levels making auto loans cheap and a spike in gasoline prices has also pushed some drivers to showrooms in search of more fuel-efficient vehicles.

Statistics Canada did not provide precise numbers for last month, but said preliminary industry data suggests sales fell 7.0 per cent in February.

The federal agency’s report stands in contrast to the figures released by some of the world’s largest automakers and a report from an industry analyst that indicated sales jumped 9.4 per cent in February from the month before.

DesRosiers Automotive Consultants said in its report — considered a reliable, if preliminary, metric for measuring the industry’s health — that overall vehicle sales rose to 106,712 last month from 97,500 in January.

Meanwhile, DesRosiers reported a monthly decrease of 14.9 per cent in January to 97,500 from 114,600 vehicles sold in December.

The difference stems from how the reports are calculated.

Statistics Canada data — which is released about six weeks after the end of the month — is based on surveys completed by automakers who consolidate totals from their dealers’ monthly reports on new vehicle sales. Its numbers are used in the calculation of gross domestic product growth.

But the DesRosiers compilation, which comes out on the first of each month, the same day automakers report their results, uses information from the automakers, the Association of International Automobile Manufacturers of Canada and the Canadian Vehicle Manufacturers’ Association (CVMA).

The two data sources have similar findings when it comes to year over year figures, with DesRosiers finding a 15.4 per cent increase in January from the year before, and Statistics Canada reporting a 15.5 per cent year-over-year jump.

In addition, Scotiabank (TSX:BNS) found a similar 15 per cent more vehicles were sold in January compared to the same month a year before.

The similar year-over-year findings — a determination that is considered a better long-term metric — suggest a trend toward improvement in the auto industry.

While Statistics Canada’s February projection suggests some softening, Kavcic said he expects overall sales for 2012 to be higher.

Sales should total about 1.6 million in Canada compared to 1.59 million units in 2011, he said.

Among Statistics Canada’s other findings from January; passenger car sales rose 23.9 per cent to 71,539 units on increased sales of lower-cost vehicles.

Sales of North-American built passenger cars led the growth, rising 28.5 per cent, while sales of overseas-built passenger cars were up 16.8 per cent in a fifth consecutive monthly increase.

Sales of minivans, sport-utility vehicles, light and heavy trucks, vans and buses rose 8.8 per cent in January, offsetting declines in November and December.

New motor vehicle sales rose in every province, with Ontario reporting the largest increase of 23.7 per cent.