Canadian car makers sold as much as 203,500 units in June, which marked another record figure for the industry, according to industry analysts.
Bank of Nova Scotia economist Carlos Gomes said that the economy’s better performance largely affected the increase. For the first time, car sales in Canada could exceed two million on an annual basis unlike in the U.S., where sales dropped in the same month.
Canadian auto analyst Dennis DesRosiers noted that vehicle sales in June reflected a 6.5% increase year over year. From January 1, the industry has recorded 1.04 million purchases in Canada. A caveat, though, involves a likely decline in the remaining half of 2017 as the country may face the same situation in the U.S.
In the meantime, the strong business for car makers will likely trickle down to smaller sectors tied to the industry. From automatic garage door repair service to automotive equipment, Quality Garage Doors noted that the positive growth affects more than just the Canadian economy.
Other indicators include better investment opportunities in the energy sector due to more pickup truck sales, alongside an increase in deliveries of crossovers, and sport utility vehicles.
If there is a downside to the higher number of car sales in Canada, it could be a potential increase in interest rates. The Bank of Canada may flag another rate hike due to the strong economy, which is mostly driven by vehicle sales.
Gomes said that they have revised their forecast real GDP growth upwards to 2.7% for 2017, which is significantly higher from around 1.5% in 2016 and 2% coming into this year.
The increase in car sales serves as an encouraging trend for car companies in Canada. Despite a forecast of unsustainable growth, the industry should take advantage of the current scenario to prepare themselves for any possible decline in sales in the future.