Canadian sales prediction: ‘slow and steady growth’

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The strong Canadian sales numbers of 2013 will not be repeated, explained analyst Jeff Schuster, senior VP LMC Automotive.

But don’t worry.

“Growth will be slow and steady as the recovery continues,” Schuster said.

Pickup sales this year are up 1.3 per cent as the housing market recovers. Compact CUVs are in high demand, increasing market share by .9 per cent to 14.8 per cent this year. But minivan sales are on the decline, down .1 per cent to 4.7 per cent of the market.

As the market grows, the types of vehicles consumers drive off dealers lots will be different. By 2017, sales of large utility vehicles, both premium and mainstream, large pickups and minivans will continue their fall to with minivans dropping as much as 7.5 per cent.

Compacts’ share of the market will remain steady.

Where there are losers, there will be winners. Compact premium sports utes will grab a near 18 per cent share of the market by 2017 while mid-size premium SUVs will do well, increasing to 15 per cent. Other winners will be the compact premium car, up six per cent; compact luxury CUVs will increase their market share to about seven per cent.
Subcompact sales will increase by about 3.5 per cent.  

The reason? An avalanche of new product.

“The next four years will see lots of activity with 230 new or redesigned - lower-end cars,” with the premium brands sharing the spotlight.

“In the premium market, growth will be bullish at the smaller end of the spectrum to 2020,” Schuster predicted.

The reason? Premium brands will become more affordable courtesy of these smaller models. In fact, LCM predicts the premium segment will dominate when it comes to growing market share from 9.4 per cent in 2012 to 11.7 per cent in 2020.

LMC acquired the auto forecasting division of long-time alliance partner J.D. Power and Associates in 2011. The two companies have been working together in the area of auto forecasting and market intelligence since the mid-1990s.

At the OEM level, LCM sees GM improving on the strength of new product, particularly midsize. But will the support - marketing, development, incentives – needed come at the expense of the Cadillac division, he wondered.

GM will see its sales share rise from 13.5 per cent in 2013/14 to 14.25 per cent by 2018. But GM will not regain the nearly 16 per cent share it had in 2010. For Chrysler, the future is not as rosy.

“Delays in new product make it difficult to see where the brand is going over next couple of years,” he said. That will contribute to a drop in Canadian sales share to just under 14 per cent by decade’s end from 15 per cent next year.

The Blue Oval will suffer from aging product as the decade moves on. That will mean a steady slide from over 17 per cent in 2012 to under 16 per cent by 2020.

Of the Asian OEMs, Hyundai/Kia is outperforming the rest taking over 12 per cent of market share, though its momentum will slow as it slides from a decade-high of nearly 13 per cent to about 12.5 in 2020.

Toyota will sell cars at or below the 11 per cent mark, while Honda will regain its nine per cent share by 2018.

Since this is the decade of the premium vehicle - according to LCM - the German 3 – BMW, Mercedes, VW/Audi – will do very well.

Mercedes and BMW will fight it out over 2.3 per cent of market share with Mercedes besting BMW on the strength of six new entries by 2015: A and B-Class; S-Class Coupe; CLA; GLA and MLC.

By virtue of its mainstream lineup on the VW side, VW/Audi is somewhat out of place in this division. But it will ride five new entries from sub-compact to pickup – and an redesigned lineup to take just over five per cent of the premium market share.

Audi will prosper with an expanding CUV lineup, Schuster predicted.