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One way to tell whether or not the economy is rebounding is to take a look at the purchasing trends of consumers. In Canada, it appears as if customers are gaining confidence. According to a QMI Agency report that came out today, the confidence seems to be growing in a big way.
Car sales have significantly boosted this summer, according to a new report from Scotia Economics which was released earlier today. There have been a number of incentives from car dealers looking to increase business by offering such advantages as “employee pricing for everyone”.
The report reveals that new vehicle sales are at its highest level in three years. Over this time span, car sales in Canada have been increasing by 6 per cent each year. A rate of 1.65 million units is providing automakers with a well-needed spike in profits. Evidently, Canadians are finding ways to save money in order to make their big purchases in the wake of the recent recession.
According to Scotia analyst Carlos Gomes: “This represents the second consecutive monthly rebound from a weak performance in May and indicates that Canadians are once again in a vehicle-buying mood.” Interestingly, however, auto sales across the world have slowed down quite a bit.
The QMI report also provides some numbers that show great promise for the state of the national economy: “Canadian vehicle sales grew to 1.62 million units in June and July up from 1.48 million in May. The Canadian economy has added 43,000 jobs per month on average in recent months.”
It goes on to note that auto dealers dropping their sticker prices by more than 5 per cent since February has helped for more Canadians to shop for vehicles this year. In fact, consumers in this country have been spending big money. The larger models with a bunch of extras were all on the menu for those shopping for cars this year.
QMI reveals that “transaction prices actually went up 5% so far this year, the largest jump since 1996. Light truck sales for instance shot up 25% year-over-year to reach a record of 930,000 units. Sales of pickup trucks — the most heavily incentivized segment with cash discounts exceeding $9,000 on some models — have climbed nearly 40% so far this year.”
The only vehicles shown to have experienced a drop in sales were the small ones. However, it is clear that Canadian confidence is flying high. This is evidenced by all the new cars on the roads. Car sales for next year are already being forecast for 1.59 million units. Meanwhile, sales in the United States remain 20 per cent lower than average.