Too early to tell if slide in oil prices, loonie will hurt Alberta sales

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By Dave Halliday

CALGARY, ALTA. – The plunge in oil prices and the value of the Canadian dollar could impact both luxury vehicle and truck fleet sales strongest in Alberta.

However, most people involved in the auto industry say it’s too early to tell how large the effect could be.

Slumping oil prices have been accompanied by thousands of layoffs in the petroleum industry, but those job losses are spread over many countries where large multinational companies are involved, reducing the impact in Alberta.

In addition, the first workers to go are primarily the fly-in employees who fly into the province for work, industry analysts stressed.

Jim Gillespie, executive manager of the Calgary Motor Dealers Association, said he heard of a luxury vehicle sale in Calgary that fell through when the buyer’s large bonus from his oil-industry job virtually disappeared.

So far, Gillespie said he hasn’t heard cries from Calgary dealers about the situation. But he points out that there could be an impact down the road, depending on how long the oil price stays low.

Along with others in the auto industry, he noted that job losses among fly-in workers don’t affect sales in Alberta. Those workers buy their vehicles where they live, whether that is Newfoundland, New Brunswick or British Columbia.

Bob Vilas, executive director of the Edmonton Motor Dealers Association, said January luxury vehicles sales weren’t as robust as January 2014 sales, but they were still equal to January 2012 levels which wasn’t a bad year.

“I haven’t seen anybody really slow down,” Vilas said.

Tom Wilson, dealer principal of Weber Motors Mercedes-Benz, said his dealership reached its sales target in January.

The Jim Pattison Auto Group will open a new Audi store in late May in Edmonton, but group president Jim Harbottle said he isn’t concerned about the impact of falling oil prices on luxury vehicles sales.

Edmonton is an important market for fleet truck sales to the oil industry.

“We have seen a little bit of a slowdown on the commercial vehicle side,” Vilas said.

Denis Ducharme, president of the Motor Dealers Association of Alberta, said most of the feedback he’s getting is that business is still good. There’s no panic among dealers about the impact of falling oil prices.

Along with plummeting oil prices, the Canadian dollar has dropped significantly and that’s having an impact on used vehicles. The low dollar makes used luxury cars, SUVs and pickups attractive in the United States and, at other times when the dollar has been low, Canadian vehicles have been shipped south.

Consumers know that they can get good value for used vehicles in the U.S., Ducharme said.

Factors that will support Canadian car and truck sales include low interest rates, following a recent cut by the Bank of Canada, and the lower fuel prices that have accompanied the skid in oil prices.

Dave Hill, sales manager at Arrkann Trailer and RV sales in Edmonton, said lower fuel prices put money in consumers’ pockets that can be used either to buy a vehicle or travel further.