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Canadian light-vehicle sales decline in 2018
After setting an eighth record year in 2017, Canadian light-vehicle sales saw a larger contraction than forecast, falling 2.6% y/y for the year. Passenger car sales continued to come under pressure and light commercial vehicle (LCV) sales continued to grow. IHS Markit forecasts that sales in Canada will continue to decline in the next two years, returning to growth in 2021.
As in many markets, passenger car sales are struggling in the face of stable fuel prices and increased competition from a more diversified light-truck market, especially the expanded market for subcompact and compact crossovers. In 2016, passenger cars captured only 34.9% of the market, and over the course of 2017 the passenger car market share fell to 31.9%. In 2018, passenger car sales fell to 29.7% of light-vehicle sales. New compact SUVs have been successful in drawing share from passenger car segments along with current light-truck segments; in the second half of 2018, 14 of 17 new vehicle updates were light trucks and SUVs, contributing to the growth. Luxury also remains a driver of market growth as registrations have been boosted by expanding premium-brand product portfolios, a rising wealth effect from the surging housing market, and high urbanisation rates. Consumers are responding well to expanding OEM product line-ups, as manufacturers attempt to move down market in terms of vehicle size and price, as well as into light utilities. Unlike mainstream segments, however, luxury vehicle sales are strong for both passenger cars and light trucks.
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