Bank of Nova Scotia : Resources-Rich Prairies to Lead 2012 Canadian Auto Sales Gains: Scotia Economics

Resources-Rich Prairies to Lead 2012 Canadian Auto Sales Gains: Scotia Economics

TORONTO, Jan. 30, 2012/CNW/ - The resources-rich provinces of Alberta and Saskatchewan will continue to lead Canadian car and light truck sales higher this year, according to a Scotia Economics' Global Auto Report released today. Preliminary data for January point to a strong start to the year, a development consistent with our view that Canadian sales will climb to 1.605 million units in 2012 - the fifth highest annual total on record.

"Alberta will continue to be Canada's growth leader," said Carlos Gomes, Senior Economist and Auto Industry Specialist, Scotia Economics. "Vehicle sales in Alberta posted a double-digit increase last year, climbing to 218,000 units - the fourth highest on record. We expect volumes in Alberta to advance a further three per cent to 224,000 units in 2012.

"Vehicle sales in Saskatchewan posted a robust seven per cent gain last year, with purchases bolstered by rising mineral production," added Mr. Gomes. "We expect Saskatchewan to be the only province to post record car and light truck sales in 2012, with purchases climbing to 51,000 units, up from 50,000 last year and an average of 43,000 per annum over the past decade."

2012 Outlook - Other Provinces

• Sales in Manitoba advanced by six per cent last year, and are expected to continue to outperform. Purchases will likely climb to 48,000 units in 2012 - the highest level since 2002, and 13 per cent above the decade average.
• Car and light truck purchases in British Columbia are expected to perform in line with the national average, climbing a moderate one per cent this year to 160,000 units, up from 158,000 in 2011. Activity will be underpinned by rising exports to Asia - the destination for more than 40 per cent of the province's overall exports.
• Vehicle sales in Ontario increased two per cent last year to 589,000 units. We expect purchases to edge up to 593,000 units in 2012, a level marginally below the decade average. Purchases will be supported by a rebound in vehicle assemblies to the highest level since 2007.
• Car and light truck sales in Quebecwere weaker than expected in 2011, falling two per cent to 408,000 units, in line with the average of the past decade. We expect sales to inch up to 409,000 units, as improving orders in the key aerospace industry help stabilize industrial activity in the province.
• Vehicle sales in Atlantic Canadaalso fell by two per cent last year to 120,000 units, with the declines concentrated in Nova Scotia and Newfoundland and Labrador due to declining consumer confidence. We expect a small increase in 2012, as confidence has begun to revive in Nova Scotia with the recent awarding of a $25-billionshipbuilding contract.
• Newfoundland and Labrador will also benefit from oil hovering around US$100 per barrel, as well from expansions in mining operations (iron ore and gold). However, Newfoundland and Labrador have the weakest vehicle-buying demographics in Canada.
• Purchases in New Brunswickwill be supported by increased call centre activity and rising exports to the United States, especially with the U.S. economy gaining momentum in recent months.

Scotia Economics provides clients with in-depth research into the factors shaping the outlook for Canadaand the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.

For further information:

Carlos Gomes, Scotia Economics, [phone], [e-mail]; or Joe Konecny, Scotiabank Media Communications, [phone], [e-mail].