New vehicle sales start the year strong

Last month saw the highest number of new vehicle sales in January since 2018.

But the bloom may quickly come off the rose, warned DesRosiers Automotive Consultants.

In its January 2025 analysis, the consultancy estimated 118,000 unit sales, up 3 per cent from the same time last year. The last time such a number was seen in a January, it was seven years ago.

However, DesRosiers wondered if this is the start of another year of annual growth or are we getting set for disappointment. Given the uncertainty around tariffs coming out of the United States, the context of the month is hard to determine. Tariffs could kickstart a recession and even higher vehicle prices, experts have warned.

Or, alternatively, was January’s performance setting the stage for another solid year in new vehicle sales, continuing a multi-year trend? The seasonally adjusted annual rate is coming in at 2.15 million. That would be the highest year on record, beating out 2017 when just over two million new vehicles were sold in Canada.

“One certainty is that the year started on the front foot,” noted Andrew King, managing partner of DesRosiers.

But there is concern. DesRosiers noted reduced sales of key zero-emission vehicle models as the national iZEV program came to a fairly sudden end. The year also means Quebec is now offering reduced incentives for such vehicles.

Despite the overall market growth, of concern were falling sales of a number of key ZEV models – as January saw a (somewhat chaotic) end to the iZEV incentive program, and reduced provincial incentives in Quebec have started.

“Further potential ‘payback’ in February and March from the rush of ZEV sales in Q4 2024 will be something we will be watching closely,” the analysis from DesRosiers said.

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