February shows slight sales dip for automakers

Increased lockdowns and pandemic restrictions played havoc on the Canadian new car market once again in February. Sales were down nearly 10 per cent compared with February of 2020, but things are about to get even stranger as it marked the last year-over-year comparison before the impact of COVID-19 made its drastic mark on auto sales. What hasn’t changed is that the light truck segment continues to capture more of the market seemingly every day.

A total of 112,645 new vehicles were sold in Canada in February of 2021, Desrosiers Automotive Consultants estimates. That’s a drop of 9.9 per cent from the 125,059 of the same period in 2020, though the figures are not as bad as many had anticipated given the increased lockdowns impacting large portions of the country’s major markets.

Light truck sales rose to 83.5 per cent of the market, per the estimate, up nearly five percentage points from a year ago as more small cars disappear from dealer lots with more expensive small crossovers taking their places.

Not all brands report sales monthly, though some who did reported gains on the month. Mazda said sales were 4,114 for the month, beating the industry average with a drop of 2.8 per cent, but they are up 2.1 per cent so far on the year. Importantly, CX-9, Mazda’s largest and most expensive model, saw sales up 22.5 per cent while the CX-5 had an increase of 6.7 per cent.

Toyota reported a drop of 10.4 per cent to 13,694, but reported record sales of electrified models. Those vehicles saw sales grow 94.7 per cent and now account for 27.8 per cent of brand sales.

Hyundai Canada saw sales grow 2.4 per cent year-over-year to hit 7,782 with double-digit sales growth from Palisade and Kona, though Sonata and Tucson saw drops. Kia saw another record month in February with 4,650 units sold. Seltos was the brand’s sales champ followed by Sportage.

Expect more brands to report sales at the end of this month, which marks the end of the quarter. That month, and indeed quarter, should be compared with 2019 rather than 2020 because mid-March is when sales began to slow due to the pandemic and related closures. April 2021 will likely show one of the largest percentage increases ever reported year-over-year for that reason.

While lockdowns are expected to continue to affect sales despite the beginnings of vaccine rollouts, there is a new threat to auto sales looming, one of dealer inventory. Semiconductor shortages have shuttered dozens of automaker and supplier factories, with some closures lasting multiple months. With some automakers reporting low inventory even before this issue, finding certain brands and models on dealer lots could become a challenge over the rest of the year.