How you look at July’s new vehicle sales will depend on how you see the glass.
The half-full optimist may be encouraged that sales are up from the same time last year and continues to build on gains seen for almost a year. The glass-half-empty pessimist may see the regression from previous months as a red flag, while further noting how far behind sales remain from pre-pandemic levels.
DesRosiers Automotive Consultants estimated Canadian sales for July at fewer than 141,000 units. That’s up 8 per cent from last July but down compared to May and June’s increases of 13.5 per cent and 12.6 per cent, respectively.
Still, July’s numbers mean we’ve seen nine straight months of year-over-year increases. However, the sales pace for the year now sits at 1.55 million units, below June’s pace but ahead of May. Last year finished with fewer than 1.5 million units sold.
“There is still significant ground to cover in order to return to pre-pandemic levels,” DesRosiers’ analysis said. “July new light vehicle sales in 2019 reached 173,519 units sold, meaning July 2023 remains 18.8 per cent behind. However, the market continues to show consistent promise, even outside of the spring selling season.”
New vehicle sales in the U.S. are also on an upward trajectory. Light vehicle sales volume in July 2023 is expected to reach about 1.3 million units, both S&P Global Mobility and J.D. Power estimate. That’s up about 18 per cent year over year, with slight variations depending on the consultancy.
“From both an economic growth and auto demand perspective, the first half of 2023 has proven once again that one shouldn’t doubt the spending capacity of U.S. consumers,” said Chris Hopson, principal analyst at S&P Global Mobility.
At this rate, around 16 million units would be sold in the U.S. this year. However, S&P is expecting 15.4 million vehicles sold this year. That’s up from its original forecast of 15.1 million.
The final result, S&P noted, will depend on a number of issues, including vehicle affordability — not just car prices, but increased interest rates and credit tightening. But, inventory could bounce back quicker than expected which could alleviate some pricing pressures in the new vehicle market.