Uncertainty as retail sales grow

There was growth across all areas of retail automotive sales, but caution is being mixed in as uncertainty looms.

“While at first blush changes in retail sales in Canada in the first quarter of 2025 seem to show significant variation, the true picture is likely not as diverse as it first appears,” said an analysis from DesRosiers Automotive Consultants about the first quarter of retail sales this year.

Automotive parts, accessories and tires grew 4.7 per cent compared to Q1 2024, ahead of gasoline sales, which were up 0.9 per cent. Used vehicle dealers saw the biggest growth at 11.4 per cent, with new vehicle dealers coming in second at 7.1 per cent growth.

However, the comparables are not a great starting point, DesRosiers’ analysis stated.

“For example, for used vehicle dealers, the first quarter of 2024 was notably weak as consumers could finally purchase a new vehicle without a months-long wait — and as a result, used vehicle prices fell sharply in Q1 2024,” it noted.

The consultancy also noted that gas prices saw a big jump in March 2024. “So the decline we have seen in March 2025 (and weak growth in the quarter as a whole) is more the result of changing price per litre than growth/decline in gas volumes,” it noted.

The average price of gas dipped from $1.698 in April 2024 to $1.392 in April 2025 as the carbon tax was removed, meaning there is expected weakness in gas station retail sales in the second quarter of this year.

However, these comparables aren’t as much of an issue when looking at the aftermarket and new vehicle market. This likely represents a more accurate picture of the market performance to start the year, the group noted.

“While the hangover from 2024 complicates the 2025 retail sales numbers, looking forward the added complexity of the ongoing tariff chaos will impact prices (and sales) in the auto sector for the rest of 2025,” said Andrew King, Desrosiers’ managing partner. “While U.S. trade action against Canada has stabilized somewhat for the time being, we are still far away from any certainty.”

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