Carmageddon Spreads to Canada

Sales fall for second year in a row, as car sales collapse further and truck sales barely tick up.

By Nick Corbishley, for WOLF STREET:

Sales of passenger cars and light trucks in Canada fell 3.7% to 1.91 million vehicles in 2019, the second year in a row of declines, and were down 6.1% from peak-year 2017, according to industry data compiled by Des Rosiers Automotive Consultants:

These sales are new vehicles that dealers delivered to their customers, or that automakers delivered directly to large fleets, such as rental car fleets. Leases are included as dealers sell these units to leasing companies which then lease them to the customer.

As has been the case in the US – a phenomenon I’ve come to call Carmageddon — “car” sales plunged 16.1% in 2019 from very already low levels to even lower levels, to 484,687 units, after having dropped every year since 2014. The share of car sales as a percent of total new vehicle sales dropped to 25% in 2019 from a share of 45% in 2012.

And truck sales rose 1.6% to 1.43 million units, for a share of 75% of total new vehicle sales, up from a share of 55% in 2012. The category of “trucks” includes pickups, SUVs, compact SUVs, and vans. Since 2012, car sales have plunged 36% while “truck” sales have soared 56%.

This chart of Carmageddon in Canada also shows how truck-sales growth has stalled over the past two years, as car sales have plunged; hence, the overall sales decline in those two years:

The dividing line between “cars” and “trucks” that the industry has been using since Adam and Eve is probably no longer relevant: Compact SUVs and subcompact SUVs, when they were established by the industry some years ago as categories, were classified as “trucks,” mostly for marketing reasons because it would allow automakers to charge higher prices for them.

But compact SUVs are based on a car chassis with a car powertrain and car components. They just sit a couple of inches higher off the ground than a car, and their roofline isn’t as low-slung as that of a car. These compact and subcompact SUVs are very popular, and the fact that they’re classified as “trucks” instead of “cars” is a big driving force behind Carmageddon.

Most mass-market brands (I define them as having a market share of at least 2%) experienced declining sales in 2019, except Toyota, Hyundai, and Kia.

Ford sales, according to estimates by Des Rosier (laggard Ford will announce its deliveries on Monday after everyone else announced their deliveries on Friday), dropped 3.4% to 287,900 units in 2019, which allowed Ford to hang on to its place in Canada, with a market share of 15%.

General Motors sales plunged 10.9% for the year, to 256,795 units, putting GM again in second place behind Ford, with a market share of 13%. The 2% uptick in Q4  deliveries, after the battering sales had taken in the prior quarters, caused the press release to crow, “We achieved solid year-end results in 2019,” while also noting that “Canadian consumer preferences shifted significantly toward crossovers, SUVs and pickups in 2019.” Namely Carmageddon.

The press release only pointed out the good stuff: Buick’s China-made compact SUV, the Envision, and the South Korean-made compact SUV Encore were hot, with sales rising 19.9% and 21.7% respectively in the fourth quarter. And GM’s pickup sales were hot too, with Chevrolet Silverado and GMC Sierra sales rising 10.9%.

Toyota sales ticked up 1.9% for the year to 211,551 units, and its Lexus brand sales rose 5.9% to 25,540 units, for a combined 237,091 units (+2.4% combined), which put Toyota in third place, with a market share of 12.4%. The press release gushed that Toyota Canada “ended the decade on a high note with its best sales year ever.” Some standouts:

  • Toyota truck and SUV sales rose 5.6% for the year to a record of 153,117 units, or 72% of its total sales.
  • Within this group, sales of the new RAV4 Hybrid soared 82% to 14,246 units.
  • And the Camry? The press release was about trucks and SUVs, and it did not even mention the Camry which has gotten caught up in Carmageddon.

FCA sales, in fifth place, inched down 0.8% in 2019, to 223,101 units, for a market share of 11.7%. Its Fiat and Alfa Romeo brands only sell a few hundred cars a year and don’t matter. FCA’s cars are being killed off methodically, visually reemphasized in its press release, which showed three photos: two of SUVs and one of a pickup.

  • Ram sales rose 14% to 102,000 units in 2019, which is 46% of FCA’s total sales in Canada! This is powered by Ram truck sales, which rose 14% for the year to 85,000 units. Ram-brand van sales also rose but the numbers were small.
  • Jeep sales ticked down 2% for the year, as Cherokee sales collapsed 34%, Renegade sales collapsed 44%, and Compass sales plunged 19%, but as Grand Cherokee sales soared 38% and Wrangler sales ticked up 4%.
  • Chrysler sales plunged 40% for the year, to just 9,220 units, as the brand has phased out its car models, whose sales have collapsed into nothingness. This brand is dead.
  • Dodge sales plunged 15% as car sales under the brand collapsed into nothingness, as these cars have been phased out, and Caravan sales plunged 15%. But sales of the Durango SUV soared 33% to a whopping 9,220 units in 2019.

Sales of the other brands in 2019 with a share of 2% or higher.

  • Honda and Acura sales dropped 3.1% to 169,047 units, for a market share of 9.8%.
  • Hyundai sales rose 4.2% to 152,988 units, increasing its market share to 7.0%.
  • Nissan sales dropped 9.4% in 2019 to 123,755 units for a market share of 6.5%.
  • Volkswagen, Audi, and Porsche sales combined fell 5.9% to 112,000 units, for a market share of 5.9%.
  • Kia sales rose 5.0% to 76,630 units, increasing its market share to 4.0%.
  • Mazda sales dropped 10.1% to 66,420 units, for a market share of 3.5%.
  • Subaru sales edged down 0.9% to 57,524 units for a market share of 3.0%.
  • Mercedes-Benz sales dropped 7.3% to 45,828 units for a market share of 2.4%.
  • BMW sales dropped 6.1% to 36,658 units, and its market share dropped below 2%; so theoretically, it should have fallen off this list.

A total mind-blower. Actual prices skyrocket even as CPI for new vehicles has been flat for 22 years. Read…  My “Pickup Truck Price Index” Crushes “CPI for New Vehicles”

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  114 comments for “Carmageddon Spreads to Canada

  1. Michael says:

    How much of the decline do you attribute to a structural shift to a permanent lower-car sales environment vs. cyclicality and cooling off from peak SAAR?

    • Wolf Richter says:

      The market is mature and saturated. This means that long-term, there just isn’t any growth left (after the recovery from the Financial Crisis). But it’s not a straight line down. After cyclical drops, there could be cyclical upswings that get sales close to where they were at the peak, only to drop again. If we get another big crisis, like the Financial Crisis, where auto sales plunge 30% or 50%, it could be followed by years of upswings back to the mature level.

      Let me also clarify that we’re talking unit sales here. In terms of dollar sales, price increases might keep revenues from dropping, or from dropping rapidly.

      • andy says:

        Wolf, wait for the super-cycle of replacing internal combustion with electrical motors. Perhaps BMW will be next Apple, and Tesla the next Blackberry.

        • Cashboy says:

          If the (Electric Vehicles) EV do in fact take over (Internal Combustion Engines) ICE I do not see the Germans being leaders in car manufacture with regard to quantity, quality and value for money.
          Anyone can manufacture an EV as it basically comprises of an electric motor, a battery and a control unit.
          I understand that the battery represents 60% of the cost of an EV.
          Nearly all batteries are made in China and these batteries are made from rare earth that is currently mined predominantly in China.
          There are therefore big changes in the motor manufacturers.

          I also understand that the political turmoil (demand for change of government) in Bolivia has something to do with the fact that the country has abundant rare earth and the current government doesn’t want to let western foreign corporations come in and mine it. Aledgedly one of those corporations was Siemens.

        • jc says:

          Not likely, when it comes to electronics the germans don’t know squat!

        • NBay says:

          Don’t know if that’s true jc. Bosch came up with CAN bus and literally everyone uses it. Lot of other good stuff, too.

        • Stelsewhere says:

          ICE vehicles are dead in the water between CO2° and the fact banks can not make any money on carbon fuel loans. As to EV – where’s the energy to power 80 million vehicles world wide? And the grid? Not. Gonna. Happen.

      • phathalo says:

        I am not sure if ridesharing and short-term rental (think Turo) in urban areas is contributing to structurally lower demand for cars?

        • Wolf Richter says:

          phathalo,

          The other side is that these rideshare drivers have to buy vehicles a lot more often than they would if they didn’t drive for rideshare companies. Instead of putting 20,000 miles on their cars a year, they’re putting 150,000 miles on their cars, and those cars will have to replaced more often. So this adds demand for cars, even as other people don’t see the need to buy a car because of rideshare options. I don’t know what the net effect is.

          But I mentioned this in the context of a package of changes, including moving to city centers, that has the overall effect of reducing car ownership (such as going from two cars to one car for a household, or from one car to zero cars).

      • CreditGB says:

        Thank you for pointing out the saturation thing.
        Best to leave the latest of many dozens of volume drops (and increases) to the auto executives to figure out and adjust to,… it is their jobs and responsibility. New consumers and replacements will be the norm for a while, unless the political elites do something stupid as they seem to have a wont to do. They don’t publicize it, but the industry has teams of people just analyzing the stupidity of politicians and their potential and actual actions.

      • GW says:

        Regulations will toughen with respect to CO2 and electric cars have already now become usable for short and medium distances. Switching to electric will involve all kinds of financial incentives and disincentives and this will affect used car resale values and indirectly new petrol car sales. It may affect the ICE car sales volumes and prices already a few years before the larger transition happens. People may for a while hold on longer to their cars as resale value drop, electric drives are progressing rapidly and availability is limited. The car market may split in two parts even more distinct than the car-truck dimension.

        • Naresh says:

          Prices are not going down as much as a sales decline so that means the industry is still strong the only reason Rideshare shutting down is because our government charging too much tax parking fees and insurance to these companies same thing we doing Lyft in Vancouver we can’t even get it because of government regulations Vancouver The Pride to self to be number one city in the world is far from it we are full of regulations regulations crime crime drugs drugs highly overrated and overtaxed we need a strong Auto industry I suggest the government’s lower the burden of tax to help these fellows out and decrease insurance rates what happened to no fault NDP government promise the reason most people are not buying cars is only because the ICBC rates are so high and now they get you if you have one drivers read is bad before you to drive from family members what a scam is government is taxed as way more than that parasite liberal government that was in it before

  2. Tony says:

    Oils cheap right now and I think Amazon bought lots of fleet vehicles lately. Makes sense. I actually just bought a high roof fleet van from them. It was a Dodge promaster. It seems like they’re liquidating the Dodge, but in the yard I saw hell of a lot of their Amazon fleet Ford Sprinters brand spankin new, Amazon logo and all. They seem to be getting ready to monopoly logistics here pretty soon.

  3. Jos Oskam says:

    It’s a pity that a simpleton marketing-driven definition of “truck” vs “car” is muddling the statistics.

    For purists like me, only vehicles with body-on-frame construction deserve the “truck” moniker. Standard unibody vehicles are just cars, no matter how high you raise the suspension or the roof line, or how big the wheels and tires you put on them.

    If these simple and clear definitions were broadly used, the “carmageddon” graphs would look very different, and a lot less alarming.

    • Unamused says:

      Thank you for formulating that interpretation. I’ve been leaning towards that interpretation also. Marketing has clouded the categories as a way to get people to pay too much for personal transportation, but looking at it this way clarifies things.

      It may also clarify things to simply lump them together as light-duty vehicles and ignore the distinction between ‘cars’ and ‘trucks’ used by the large majority of people who do not haul stuff.

      Marketing has changed consumer preferences. People have changed. People are encouraged to be more narcissistic and self-indulgent. They’re increasingly inclined to sedentary screen addiction, not to be more industrious and more adventurous. It’s hard for me to believe more people want to haul stuff with a truck. It’s easier to believe that people would like to pretend they’re more industrious and adventurous, so they prefer a car that looks like a truck to promote that pretence.

      Earlier articles on this web site discussed related issues:

      – Total vehicles in service have been increasing.
      – The average age of vehicles in service has been increasing.

      It might be interesting to try an overall interpretation of the macro trends to obtain a clearer picture of where the industry might be heading: increasing numbers, increasing age, changing consumer preferences, and flattening sales. Maybe later.

      • Cas127 says:

        “so they prefer a car that looks like a truck to promote that pretence.”

        Historically at least, women were notably disproportionate buyers of SUVs – I think the perception of increased safety/the reality of increased line of sight are actually behind a lot of the SUV surge.

        And of course Detroit likes the trend because they can charge more while gaming the MPG rules – SUV are legally placed in the truck category which has much much looser MPG requirements (ie older, cheaper technology can be used)

        • Endeavor says:

          Cars127
          They say women like to sit up high is the reasoning for the SUV preference. Maybe a periscope for sedans could have filled that desire. :-)

        • NBay says:

          Like the ad says, “so you can go do truck stuff”…..like impress the neighbors with lots of mud….i.e., “adventure”.
          Someone who owns a worthless lot that floods should start a business……..

        • Morty Mc Mort says:

          SUV – Hatchback is excellent for passenger or Cargo Versatility. Higher Profile, one you get used to getting in and out of a small SUV, you hate getting in and out of a lower car. Higher Profile, better visibility of traffic and in traffic. Simple Choice, really…

        • NBay says:

          Making fleet MPG requirements is and ALWAYS WAS behind the whole truck-suv-chassisless suv-crossover suv marketing and manufacturing. They can’t do a hell of a lot more to make ICE engines efficient without perfecting turbo (heat, lag, etc) and Ceramic engines seem to be up against a materials dead end.

          And god forbid they have to make smaller vehicles, but that IS the only logical answer. Sir Issac Issagonis had it dead right back in the 60’s, but the profit margins down the whole line to consumer would really suck…and no corporation (or their investors) wants that.

    • Nicko2 says:

      See Tesla Cybertruck. It’s a 21st century truck.

      • Reality bites says:

        It’s vapor ware, not a truck or a car. At best it is a research prototype that may or may not come to market

        • CreditGB says:

          Only Dorothy and Toto would think the Tesla thing was a truck.
          Oops, Sorry, didn’t mean to exclude “Alice”.

      • NBay says:

        If Ca law didn’t limit specially constructed vehicles to 500/yr (supposedly by lotto…ha-ha) it looks like what I’d build. Triangle strength and square tubing is easy to work with.
        I once built , licensed, and drove an enclosed 3-wheel MC, back when they let you, (1981), but no enclosed three wheelers allowed now. Car Corps stopped that dead.
        Go big or go to hell is the basic car business law now….even with propane power, I was gonna buy one of those kits when I was off grid and about ready to afford a propane tank, refrigerator, stove, and generator. Fleet only, now.

    • KGC says:

      The “truck” definition is driven more on the manufacturing side by the fact that they have much lower EPA and safety requirements than do “cars”. The small pickup (Nissan Frontier/Toyota Tacoma/Dodge Ram/etc) of today actually gets worse fuel mileage than the comparable vehicle from 30 years ago, and there’s no requirement for them to fix that. Cars, on the other hand, have had to sow improvements, so that the Dodge Challenger of today actually posts 30%+ better fuel economy than the old 1970’s models did.

      If someone would actually build a small 1/2 ton basic pickup truck that got 30+ MPG I’d consider buying a new vehicle. But they don’t, and the last brand new, off the dealer lot, purchase I’ve made was in 2002.

      I currently have two “trucks”; a 1986 Chevy C10 which I bought for the 8′ bed at the sum of $400, and a 2004 Nissan with 41,000 miles on it (still looks new) which cost less than 1/4 what dealers are asking for a new one.

      I strongly believe that we have enough vehicles in the USA that, if everything stopped today, we wouldn’t have to actually produce another for a decade. What I see fueling new vehicle sales is a combination of Marketing driven “wanting”, and sales to people (low income/students/first time buyers) who cannot get a loan for a used car. That’s not healthy for the economy, or the planet.

      • RD Blakeslee says:

        Cuba has more or less managed it for 6 decades.

        • Javert Chip says:

          Having recently been to Cuba, it was interesting to see most non-tourist personal transportation (outside the couple of big cities like Havana) is conducted via bicycle and horse-drawn carts.

          That’s how the’ve “managed” it.

        • sierrs7 says:

          RD Blakeslee:
          Giggle!!
          U took the words (maybe paraphrasing) right off my brain!!!!
          If we want to see how to prolong the age of autos lets go to Cuba!!!!
          Bravo!

      • NBay says:

        Agree. If Toyota built an EXACT replica of any 86-95 PU with 22RE engine, same running gear with manual, and merely updated to electronic controls, coil over ign, and a couple airbags, etc, people would buy them like there is no tomorrow. The kids are already hip to them and even with the old vac controls have learned to fix them. They are everywhere. Toyota knows this and will never do it because they are cheap and forever. Aftermarket parts abound.
        It’s all about what THEY want, not what WE want….but what do yo expect from a corporation?
        So much for “consumer’s freedom of choice”.
        Even the ME terrorists are getting roughly what I described to put their 50 cals on….and that’s really a slap in our faces.

      • Tank says:

        If it weighs >6000 lbs, you get a deduction for full purchase price in the first year it’s “placed in service” id used 100% for business. The only hauling most trucks do is soccer teams and gear and only off reading is when the driver takes a right too hard and runs over the curb. Never knew so many docs and lawyers needed trucks, Section 179, IRC…https://fitsmallbusiness.com/section-179-deduction/

        • NBay says:

          RE: Link
          I knew contractors and other licensed construction, repair, and fabr types did that, but can anyone with a biz?
          That is still really direct from gov’t to corp money, I thought they still wrote them off over time…not very much time, though.

      • Cashboy says:

        I am surprised that you do not have the Toyota Hilux Pick Up Truck manufactured in the USA.

        It is the best selling “car” in Australia, Thailand and a lot of SE Asian coutries and South Africa and of course the Middle East where it is the choice of the Taliban and Isis.

        Smaller than the Toyota Tacoma and weighs 2 tonnes ( 4,400 lbs ) and is available with diesel and petrol engines.

        • NBay says:

          At that weight, it sounds like it hauls an honest 3000 + lb. You have to buy a lot bigger truck here to get that.

        • Cashboy says:

          NBay

          The Toyota Hilux Revo:
          Officially maximum carry capacity is 1250 Kgs ( 2755 lbs ).
          Loading them up with 3,300 lbs would be ok and you can buy a kit with heavier leaf srings and struts and rear axle and then take up to 4,400 lbs I would guess. Manufacturers give them towing capaity of 3,500 Kgs ( 7,710 lbs ).

        • NBay says:

          Thanks. I guess USA consumers will put up with more BS from car companies than the rest of the world, or their lobbyists simply run our so called gov’t of, for, and, by the people.
          Don’t you Aussies have bumper stickers that say, “better criminals than puritans and euro-trash”?
          Saw that somewhere and it explains many things.

    • wkevinw says:

      The “frame” is such an odd item nowadays, it’s hard to define (for me-and I am from a “car family”). I know the Ford F-150 (I think?) was defined as a unibody truck, even though it looked like it had a frame to me (I am not a Ford expert).

      I think some of the Honda trucks are unibody- but don’t they have some kind of frame?

      I have seen some GM trucks and vans (“small”) with partial frames- S10, Astro? I think these are trucks.

      Anyway, the “unibody” where a higher percentage of the structural strength is in the body, seems the wave of the future for SUVs and light duty “trucks”. Unibody is lighter and more fuel efficient.

      I think I want a frame to haul about 1000 lbs around in the back.

  4. Iamafan says:

    So how did Subaru manage to mantain positive growth? What’s their secret sauce?

    • Iamafan says:

      I mean even if the numbers are down nominall, they were close to ZERO. Thats relatively positive.

      • DR DOOM says:

        Iamafan: It’s the dogs they use for advertisement . Young people see themselves with the dog, old people see just the dog and it’s easy to get into the seat with hip and knee replacement hardware rattling around. When you hit 70 You have to work to climb in a full size 4wd real truck. Might take a couple of shots at it to climb in first thing in the morning before you loosen up the old pivots. Me and my old springer spaniel can tell you all about it.

    • sc7 says:

      Not making garbage cars like FCA, GM and Ford.

    • Mars says:

      Iamafan -Anecdotal evidence suggests any model with “WRX”

      reply to Oskam and Unamused – the differentiation is irrelevant considering combined sales trending down past two years. Trend accelerating.

    • roddy6667 says:

      They market aggressively to lesbians by sponsoring events that are part of their culture. Perhaps they also have a hidden ownership in companies that make comfortable shoes.

      • Javert Chip says:

        Without a shadow of a doubt, that qualifies as the greatest marketing analysis I’ve ever read!

      • Heff says:

        Wifey just bought a 2020 Crosstrek. (full disclosure-she’s not lesbian). She loves it. It’s a tad higher than the Imprezza for snow and ground clearance. I find it a bit “gadgety”, many buttons and knobs to “help” you stay in your lane etc…but all in all, rides great, looks great, and our little dog likes it too!

    • ft says:

      If you get down to comparing compact suv models in detail, the Forester starts looking pretty good, and I’ve got one. If you look at performance per dollar in a practical package, the WRX looks good, and I’ve got one of those too. Part of their secret is that they are designed AWD from the ground up.

      • RD Blakeslee says:

        The Forester also has adequate ground clearance for country roads and snow cover in Northern latitudes and a higher roof (both featres mentioned by Wolf), which is a blessing for older folks getting into and out of it.

    • Bobber says:

      The Forester and Outback hit all the bases – style, value, reliability, roominess, AWD, high seating position, comfort, etc. Other manufacturers can’t quite match the overall value.

  5. John says:

    Hey Wolf
    2012 bought a Mustang Pony 31k with all bells and whistles. 71600 miles now. 300 horsepower 6 cylinder 3.7, looking at a ranger to build, has a 2.3 Eco and way too low to the ground with four by four traction. They are even building mustangs on these frames you are talking about, electric to boot. Stopped making the 3.7, what a motor! I just can’t part with it, and can’t be enticed into a truck.

  6. No1 says:

    The only question I have is: what has to happen before the stock market will finally awake to this bearish reality?

    It’s hard to fathom that the central banks are really so powerful that they can paper over fundamentals completely as they are doing. Auto sales declining for two years shouldn’t be accompanied with the share market going up by 30% or whatever it has been!

    • Unamused says:

      It’s hard to fathom that the central banks are really so powerful that they can paper over fundamentals completely as they are doing.

      CBs really are that powerful. So are other categories of corporations, particularly internet and communications technologies. Corporations rule, and they rule national governments as proxies to hide behind, for the time being, but not for much longer.

      It’s not just economics and finance. They’re molding people and human societies to serve them and discarding the unwanted. Marketing is replacing culture everywhere. Mass surveillance and mass control are becoming total and totalitarian with no resistance. It’s getting worse, and it’s getting worse faster all the time.

      https://www.salon.com/2020/01/04/a-decade-closer-to-apocalypse-looking-back-at-the-mayhem-of-the-2010s/

      Have some more coffee. Have another danish. Check your email. Football will be on later.

      • doug says:

        https://www.technologyreview.com/s/614934/teenagers-without-cell-phones/

        ‘They’re molding people and human societies to serve them and discarding the unwanted. Marketing is replacing culture everywhere. Mass surveillance and mass control are becoming total and totalitarian with no resistance.’

        Yes. For example see the article above.

        • Unamused says:

          Thank you Doug. And thank you Dr. Srigley.

          My students had failed a midterm [philosophy] test rather badly. I had a hunch that their pervasive use of cell phones and laptops in class was partly responsible. So I asked them what they thought had gone wrong. After a few moments of silence, a young woman put up her hand and said: “We don’t understand what the books say, sir. We don’t understand the words.”

          That’s bad. That’s disturbing. This is what happens when the humanities are discarded to focus exclusively on ‘job skills’. The Morlochs rule the Eloi as the great books with the great thoughts turn to dust, and only the rings remember them.

          If I return it may be a very long time. No, don’t thank me. I tremble at your doom.

        • Cobalt Programmer says:

          I should not turn this to another education related blogs. I worked as a teaching assistant in a Midwestern university. Most of the students really write like a 12 year old kid. Sum r lke tis. Coming from India, I understand the language as a whole changes with time. But here i suspect the devolved language will affect our thinking capacity also. Recently the OECD data put US adult education at a very lower level

          https://data.oecd.org/eduatt/adult-education-level.htm

          Students cannot turn their smart phones off. Its dangerous than a street drug. Professor will be killed if he enforced this. I am really worried about our brain than recession. Because US has seen several recession and depressions but education is a different game.

      • Cas127 says:

        “CBs really are that powerful. So are other categories of corporations”

        Even huge corporations can’t print money at will to buy influence. CBs can.

        Huge corporations can’t make you pay for their product even if you don’t buy it – but your local school district can.

        It takes government intervention to turn a crisis into a catastrophe.

        • Unamused says:

          It takes government intervention to turn a crisis into a catastrophe.

          The problem is corruption of government by the greedy and ruthless, not governments per se. Government is a tool. It’s in the way that you use it. Or abuse it. Or use it as a scapegoat so you can get rid of it and have your favorite corrupt corporations run the show.

      • Endeavor says:

        I know a Eastern European who have been in the US for about 15 years. They work like dogs to provide for 2 children and themselves living in a small ranch house. Husband owns a auto repair shop and wife is a hair stylist. They carry no debt but a mortgage.
        They know others from the old country who come to the US and many go back. They complain that the reality is doesn’t live up to the marketing they saw on American tv. Only those that hop on the easy money/debt train stay for the most part but are constantly hitting up the hard working family for money.

      • noname says:

        An 18-year old female relative was repeatedly bullying a 4-year old relative at Christmas this year. She didn’t even watch his face to see he was sad at what she thought was funny. When she was finally confronted, she lost her cool, screamed, and left. Daddy came to her aid, blew his top, offered up a threat, and left. This is why I am not a teacher. The scene was horrific; there was no logic or reasoning among “adults”—everything is now a “game” like they watch on TV. I fear for my country…

  7. Iamafan says:

    Are Millennials buying cars at the same rate as boomers did? What if they have a different lifestyle? Comparing numbers will not make sense.

    • Cas127 says:

      “What if they have a different lifestyle? ”

      Like living as indentured servants thanks to the MasterCard compassion of the Boomers?

    • Petunia says:

      Just yesterday, this subject came up in conversation. The guy, maybe in his late 30’s, ditched the car. He moved to the city a few years ago, rides the bus to work, Ubers around town at night, and uses Uhaul vans once a month to do big errands. Used the extra money to buy a small house instead.

      I think the automakers have priced themselves out of the market.

    • Wolf Richter says:

      Iamafan,

      Yes, there is some of that. But I’m not sure it’s generational. I think it’s more dependent on where people like to live. Those who live near the center of big urban areas (including seniors) may not need a car and may find a car too much hassle and too expensive (parking), and they walk, use mass transit, or use ride-share options. Or they have one car in the household, instead of two (we’re on that program).

      Living in city centers has become very appealing in many places … if you can afford it. This is a big shift that spans all age groups. If you look at construction, multifamily construction has been hot over the past decade, and these are mostly big towers with hundreds of condos and apartments each, near urban centers. Lots of boomers are moving into these towers (their kids having moved out, hopefully). This is starting to have an impact on transportation needs.

      • Dan Romig says:

        Wolf, that’s a good description of Minneapolis, and to a slightly lesser degree, St.Paul. It helps that we have the light-rail lines to develop alongside too.

        But I am doing my best to counter the trend towards ditching the car and motorized transportation. Most of my friends are also, as they hand down their used vehicles to their high-school and college-aged kids and turn around to buy new wheels for themselves.

        Heck, as a true Minnesotan would, I bought a new motorbike at the beginning of January!

      • I live in one of those quaint “bedroom” communities, but lately they have been going vertical. Three story is a skyscraper by city standards. I could move into one of these, get rid of my car, and my PU, (registration fees are brutal) and have my groceries delivered. The finances support the move, even if the condo is more expensive.
        If they can match wages and prices there are no limits to growing this sector. Right now older ‘multifamily’ homes on a city lot, or 1/4 acre fill the need. The property I live on may return to agriculture, where it was 100 years ago.

      • Catmando says:

        “Living in city centers has become very appealing in many places ”

        Millenials do this because of Uber and lyft. Those are both subsidized by cheap money. When Uber and Lyft are regulated out of existence, I think we’ll see a shift on where the youngins live.

        “Hey I can just use Uber to get around” won’t be so appealling since it’s never really been profitable.

        • Greg Hamilton says:

          I don’t think Uber and Lyft will be regulated out of existence. Quite the opposite. They would not have come into existence without the help of easy money and friendly legislators. The cheap money as you call it will continue. To our friends at the top, the results of terminating the process are unthinkable.

      • Morty Mc Mort says:

        Think about it – the fleet management numbers put car ownership (all costs in) including gas, Maintenance, Depreciation etc at 11,000.00 to 14,000.00 per year (Look it up) So, consider a suburban couple – many or most need 2 cars for 2 jobs, and they end up costing at least 22,000.00 per year (AFTER TAX)!! now, dump the cars and use that to purchase downtown, and use transit/uber… you are way ahead, and you have a piece of home ownership instead of rusting iron… Appealing for many!

  8. Joe says:

    My 2010 SUV has been good to me at just 70,000 km. But I have had to replace my whole front end suspension due to some nasty potholes that are even on the highways and the calipers for the breaks have been replaced a few times, probably due to cheaply made and ceases up.
    The new vehicles are horrendous in how cheap they are now in quality and all the vehicles styles seem to blend with each other. Getting hard to tell the difference in brands.

    • Zantetsu says:

      How is having to replace your whole front end suspension and also have brake problems at just 70,000 km “good for you”? You have the low standards of an SUV driver I guess.

      • Joe says:

        Potholes are the big problem and has bent the rims on my vehicle. Too numerous to avoid even in highway traffic.
        Many are on the highways and the faster speed over them reduces the damage when hit hard at lower speeds. Can’t avoid the heavy traffic.

    • Frederick says:

      My 2015 SUV has 68k kilometers and my brakes and front end are perfect Only do scheduled maintenance and replaced the tires

    • Cashboy says:

      Joe,

      You need to do some research in the brand / manufacturer you have.
      I read so much about the quality of vehicles is going down hill and that the only two brands to buy are the Toyota and Honda in the USA.

      I live in the UK:Thailand.

      Have a look at YouTube – Scotty Kilmer as he appears to be a straight talking American uninfluenced tight assed older vlogger.
      I would say that an American can learn a lot from him.

  9. Yerfej says:

    Since the federal government is collecting money to combat the global warming phenomenon maybe they should use this cash to begin production of a Canada people’s warming car that would address this pending disaster? They could take over the Oshawa facility and mandate that citizens purchase this new GWUV to save the planet?

    • Unamused says:

      Since the federal government is collecting money to combat the global warming phenomenon

      The US federal government does not combat climate change. It fights the people fighting climate change.

      • Javert Chip says:

        …and its one of the few countries on the planet actually lowering CO2 emissions…

  10. Paulo says:

    Anecdotal from Vancouver Island:

    Dealers are plugged with vehicles. In Campbell River, a very large truck centre where 2wd pickups are only available by special order, the local Ford dealership has over 50 new pickups parked across the highway on some vacant land. Their primary lot is packed to the gills.

    Last year I was looking for a new truck as my son gets a large fleet discount which this Dad could piggyback. The dealers played coy and didn’t want to meet our price and played stalling tactics. When they finally phoned back I had already moved on and now drive an 18 year old 2wd GMC Sierra with 80K on the clock and no rust, anywhere. This truck cost me less than 1/2 of just what the taxes would have been on something new. No brainer and no deal for the dealers.

    Meanwhile, I believe our Provincial strong economic numbers are relying solely on new residents moving in to retire or relocate from too expensive cities like Vancouver and Toronto. Construction is booming, everywhere, but traditional resource industries are in the toilet. Yesterday, I received my property assessment for this years taxes. My primary residence has increased 17% over last year. We also own vacant land and that has increased 10%. Thankfully, our final tax bill is rural low.

    The cost of reg gas is now $1.30 per litre, and if the Iran conflict blows up, (which it looks like it will due to the genius making decisions), I think it could eventually double. That won’t do much for vehicle sales.

  11. David Hall says:

    With Uber and Lyft fewer people need cars. With Amazon, Google, Ebay and a thousand online stores one does not need to drive to a distant location to shop. Fewer miles driven = longer lasting vehicles. A supermarket chain will deliver groceries; great for the handicapped and seniors not needing auto expenses. There is takeout delivery. There are rental cars for the occasional user. Public transportation in the cities is a plus. Carpooling is efficient. Some large SUV’s seat nine people. Passenger vans seat up to fifteen.

    Car sales growth rises and falls.

  12. Realist says:

    I wonder how many out there look at things the same way as I do regarding the future ? I’m driving an old car that i keep in spotless condition, keeping an eye on developement of propulsion technologies. The longer I keep my old one, the easier it will be to choose power source when finally buying a new one:

    – hybrid
    – battery
    – fuel cell

    From a pure technologicai point fuell cell ( hydrogen ) is the most promising from my point of view, let’s see what the Japanese will turn out and the Germans, too. Bosch is apparently developing fuel cells large scale.

    • Petunia says:

      I lived through five hurricanes in Florida. The experience has left me leery of electric cars with relatively short travel ranges. Sometimes we lost the power for a day or two, once for over a week. Evacuation in these places can be over long distances and long time frames. I wouldn’t consider a switch out of gasoline until the infrastructure and new technology merge.

      If I had a house and the extra money, I would definitely do the Tesla Power Wall. Then maybe one of my cars would be electric.

    • Old-school says:

      I might be done buying cars. I drive about 10,000 miles so I think I have about 6 more years of life in my car. My parents are 90 and 93 and have two vehicles each with about 10 years left that will be mine if I want them. A car is a nice way to get from point A to B but it’s not the big deal like it was in highschool.

    • Cashboy says:

      Realist,

      I look at all the types of power wondering what the government will be deciding on.

      Hybrid – I would avoid as basically an ICE and an electric motor and battery an some ECUs that have to decide what to use at any given time. Too complicated and therefore likely to go wrong.

      EV – will always have a problem with range and as 60% of the cost is batteries will cost a lot to replace.

      Fuel Cell – Hydrogen – I cannot see that happening because of the cost of constructing fuelling stations and delivery of hydrogen tothem.

      I am in Thailand and bought a 2.8 Diesel Toyota Pick Up Truck with a diesel engine on the basis of range and fuel availablity. Lorries will continue with diesel for many years and tractors use diesel and you can always throw in some vegetable oil to keep your vehicle running. Maintenance and Service are simple.

      I am surprised that the USA does not have mid sized diesel pick up trucks.

  13. Michael Engel says:

    1) If the restaurants sector will use AI, oppressed workers
    will make more money.
    2) The median salary for worker with high school degree who has not
    attend college increased 1% from 2008 til 2017, to 38K.
    3) 30 millions workers without college degree work in industries
    where the average wage is < 25K, plus snap.
    4) The gov should start supporting policies that increase automation in
    in sectors that employ the poor workers.
    7) It will increase demand in other parts of the economy that pay
    non college education workers mid range salaries.
    8) Less waitresses, less barista jobs, but more skilled workers in the high tech, the software sectors and the robotic sector.
    9) Software publishers without college degree average annual
    salary = 85K, x2.5 higher than all workers without college degree,
    and higher than workers with at least a bachelor degree = 77K.
    10) In the energy sector, non college workers – electric & gas workers,
    electric power generation & distribution workers, oil & gas extraction,
    petroleum refinery…. make 70K.
    11) Loggers….of course !!
    12) The high tech sector employ a smaller share of workers without college
    degree – only 32% – in comparison to other industries – 57%. In the software industry which employ only 16%, the average worker salary is 51K.
    13) Robots are sheep herding dogs helping farmers.
    14) Smart US industrial dogs can help compete with China.
    15) Everybody hate FB & Google, but they can help.

    • Yak now says:

      Yes, but with the money these newly unemployed people DON’T make, they can run out and buy $60K cars and trucks. It’s science!

      /sarc

  14. James Naylor says:

    Fuel cells?
    Forget about it.
    My son, electrical engineer, worked for a Silicon Valley start up
    first job after graduation & after several years and several of his
    patents later told me that the “ROE (Return on Energy) for fuel cells
    equals inefficiency”
    This ROE could also be true for EV, battery, hybrid and wind.
    Maybe the manufacturers are just producing vehicles that “the
    public thinks are efficient?

    • Yak now says:

      We are selling a lifestyle and a political message, no one drives these things! Our customers want to virtue signal. They want their friends to know that they, the guy parking the hybrid, is oh so much more eco-aware than their friends who arrived in a rikshaw pulled by the peasant class that is struggling to pay off student loans.

      Why are you asking about engineering and efficiency? That’s math, and math makes my head hurt. I need an avacado toast.

      • Greg Hamilton says:

        I don’t think hybrid cars virtue signal anymore–electric vehicles do. An example is that the Rav4 Hybrid is now Toyota’s best selling hybrid. Nobody would notice it is a hybrid unless you read the badge on the side. The Rav4 Hybrid is a reliable, relatively powerful car (SUV) that gets excellent city gas mileage and it is not much more that the gas 4WD version.

        • Cashboy says:

          I would avoid a Hybrid if you want to keep your vehicle a long time.
          A Hybrid comprises of an ICE, and electric motr or two and a battery and a control unit withe ECU that decide what to use at any given time. Too complicated and too much to go wrong.

          Have a look at something like a washing machine. In the old days they basically comprised of a motor, pump and mechanical clock. They were relatively easy to fault find and fix. Now they have electronic programmers and sensors that go wrong and difficult to diagnose without specialised equipment. Same thing with cars.

    • andy says:

      Is that low ROE when compared to energy stored in fossil fuels that took miilions of years to produce? I suppose your son isn’t archeologist too.

  15. A says:

    A freaking MINI Cooper Countryman is considered a “truck” by this silly definition.

    Come on, any definition that thinks a MINI Cooper is as much a truck as an F-350 is silly.

  16. Barney Simpson says:

    My alma matter just bragged that the dining halls now offer an omelet station, because many students are unfamiliar with how to cook omelets on a flat grill and were injuring themselves.

    This comes on the heels of a newspaper story last summer that canned tuna fish sales are way down among younger generations (who can’t afford student loans?)… Consumer testing showed that younger generations were unfamiliar with how to use a manual can opener.

    Same generation getting flack for having their parents write their college essays for them, and in Hollywood’s case their parents just bribed their kids way in.

    Now the progeny of helicopter parents is tasked with paying their own rent (the cannot) and driving themselves to work (they don’t know how to drive) in cars / trucks they can’t afford.

    These kids struggle to come up with $1000 for the latest iPhone. A car/truck is simply out of reach, even if they knew what to do with one.

    Helicopter parenting has produced a generation of sissies who can’t drive any vehicle and can’t afford one anyway.

  17. Augusto says:

    If you were to factor in the growth in population, real sales of cars would be even worse. Canadians are broke, their credit cards maxed out, and the jobs are getting crappier (ie. minimum wage service sector) not to mention there being less of them. My guess is by the middle of the year Canada will be in recession, ahead of the US.

  18. Cashboy says:

    I don’t see those sales figures as that bad.
    In fact they are pretty impressive.
    They are still the fourth highest unit sales in the last 10 years by that graph.

    What amazes me with all you financial experts, is that you all seem to believe that there has to be a sales growth and increase in GDP.

    If you actually look at the growth over the last 40 years, you might conclude that it is actually driven by debt.

    Some of us are concluding that it is better to have no debt, live within your means and not be a slave to the banks.

    • Old-school says:

      Yep. I never liked debt and fought it all the way, but my two ex’s weren’t bothered by it. I was sad to see each go but it’s been a long time and to be honest life is better without them. A debt free life is a free life.

    • Willy Winky says:

      If large numbers of people lived as you do the economy would collapse

  19. Jason W says:

    A fine site.
    My model has the millennials voting for anyone who will make things easy for them. They will vote their loan debts away, ignorant and careless of the consequences of doing so. They lack all of the traits needed to maintain their own vehicles, and I would bet a surprising number are actually scared to drive. Combined with the prices of new vehicles, the ever-stretched consumer, aging boomers, low birth rates , and the huge economic collapse coming as a result of all the above-I agree that we’ve seen a secular top in private light duty vehicle ownership.

  20. Ken Wu says:

    In Vancouver, every US auto dealer has as many or more 2019’s as they do 2020’s….still. They should’ve sold through most of the 2019’s by now, with maybe a dozen or so left.
    So, auto sales to dealers may be down a few percent, but dealer sales are down much, much more. 2020 sales will fall off a cliff for US automakers.

    • IdahoPotato says:

      I bought a new Honda Accord Ex last week in Boise, Idaho. The 2020 model was $2000 cheaper than the 2019 model. And the 2019 model cost about the same as a 2019 lease with 9000 miles on it. Makes no sense.

      • jon says:

        Brand new cars come with lot of factory incentives not available on used cars. Few months back, I also bought a brand new suv thousands less than a 2 year old suv with 25K miles on it.
        On top of it, dealers are incentivized to sell more new cars than used cars by auto-makers.

  21. Sammy Iyer says:

    World’s cheapest electric car is coming to India in February at Auto Expo 2020
    The Great Wall Motors, the China’s largest SUV maker, has recently announced its India entry with Haval and ORA brands.
    Ora R1 will also come equipped with artificial intelligence feature along with connectivity feature.
    Great Wall Motors (GWM) is China’s largest pickup manufacturer and it owns four brands which include Haval, Wey, Ora and Great Wall Pickup. GWM is based in Baoding Hebei, around 150km south of Beijing, and is currently looking for a suitable location to set up a manufacturing plant in India.
    News reports suggest that GWM is likely to acquire “General Motors’ manufacturing facility in Maharashtra near Mumbai”
    some interesting features of Ore R1 electric car:
    -Ora R1 electric car gives a maximum mileage of 351 km through its 35 kilowatt motor on single charge. Great Wall Motors sells three EVs under ORA brand – R1, R2 and iQ.
    Ora R1 will also come equipped with artificial intelligence feature along with connectivity feature. The owner can wake up the car by saying, “Hello, Ora”
    The top speed the car will be around 100 kmph.
    The company will provide free servicing for three years (or 120k kilometers)/ eight years (or 150,000 kilometers.)

    The expected price of the car in India will be at

    $8,680 to $11,293 ! (₹623,000 to ₹800,000.)

    • Nicko2 says:

      Piaggio just released an electric tuktuk, around $3000 mark. Super cheap, they’ll sell millions in emerging markets.

      • Sammy Iyer says:

        Auto Rikshaw (Tuk Tuk ) is a public transport in India (50% cheaper than sedan taxi). It is also used as mini delivery truck in markets/narrow roads for small deliveries, Only issue is electric tuk tuk up front price is 35%+ more than ICE version ———– Most Tuk Tuk drivers are poor rural un educated youth . They eiether borrow at high interest rate from Loan shark money lenders to own the auto or rent on a daily basis from investors ( all corrupt street cops have 3-4 autos in their spouse names (benami)which they rent out to poor tuk tuk drivers to earn un taxed cash income.)
        Piaggio Auto Rickshaw Price In India
        Petrol/LPG/CNG/Diesel versions are around ₹1,50,000/- approximately.(1$=₹72)
        Electric Tuk Tuk ₹200,000+ (say $3000 on road) will take off if charging infrastructure is established first.

        Aspiring middle class who buy their entry level 900 CC compact sedan car (ICE) spend around ₹400,000 ($5800 ) say Suzuki ALTO/ Hyundai Santro
        Chepest Chinese GWM’s ORA R1 electric compact car is going to cost $9000+ ( for which one can buy a spacious 1100 cc sedan ICE car bigger than a compact)
        Coming US-Iran war resulting in sky high petrol price will push electric car ownership possibly despite upfront higher investment.
        India & China depends on Iran for 25% of their crude imports . If Iran catches cold , Indian economy will get Pneumonia in the near future if crude oil goes thro the roof.

    • Willy Winky says:

      Did I mention a green friend has had to replace a battery in a Prius 3x within 8 years at a cost of around USD5000 each time

  22. Hotairmail says:

    There’s so much uncertainty around fuel types it’s not a surprise. Pick up a new efficient petrol, or heaven forfend a diesel and you could end up being labeled a “mass murderer” etc., excluded from cities, priced off the roads.

    Pick up an electric now with little to low confidence still in its powers. Even then there could be a major shift mid stream to something like Hydrogen fuel cells, the Japanese favourite technology.

    So wait and see seems to be the watchword. The old car has a few years left in it.

    • Nicko2 says:

      Most electric vehicles will reach price parity with ICE in about 3 years. China will dominate the global market. You won’t have to wait long.

    • Cashboy says:

      Hotairmail,

      I am surprised that there are so many new car sales because if I was buying new would be waiting to see what the government is proposing.

      A few years back the UK governemnt was pushing diesel cars because the CO2 of petrol was taxed heavily because of environment issues.

      Then suddenly they decided that the particles from diesel fumes was worse than petrol and now diesel cars are banned from London and large cities.
      The knock on affect has been a crash in the second hand value of diesel cars.

      Now people are unsure what they should be buying and a lot are holding on.

      • Augusto says:

        Like the comment about Diesel. EV’s result in so much pollution (acids, heavy metal residue, mercury, etc…) from “rare earth metals”, one should call them Toxic Waste Dumps, TWD’s rather than EV’s. With current practices, if we ever replace a significant amount of ICE’s with EV’s, we will likely poison half the planet. Unfortunately, letting bureaucrats and politicians decide what is “better” for the environment will get us all killed.

  23. RagnarD says:

    Wolf,

    Can u pls explain “allow” in the sentence below?

    “Compact SUVs and subcompact SUVs, when they were established by the industry some years ago as categories, were classified as “trucks,” mostly for marketing reasons because it would ALLOW automakers to charge higher prices for them.”

    I take it that u mean the public/buyer will be pyschologically more willing to pay more for a truck than a car. Or is is something else?

  24. SimplyPut7 says:

    Life is getting expensive in Canada. Rent in the major cities is up 25-30%, basement apartments in Toronto go for $1000-$1500. Studio condos go for $1900, traditional apartments (no laundry in unit) go for maybe $1700 for a studio if you can find it. One-bedroom rentals start at $2000, two-bedroom start at $2200. Most homes within a 2-hour radius of Toronto still sell for $500,000 or more.

    These are not people who make hundreds of thousands of dollars like in san francisco or new york, median family income is $75,000, 90% of the population in Canada makes less than $80,000 a year.

    Monthly payments for a new car with an 84-month car loan is not low enough to cover the cost of owning a car while paying high housing costs and to get a used car costing less than $10,000 (tax included @ 13%) it needs to be about 10 years old or older.

    And because new cars are so expensive, insurance companies have kept rates for cars high (larger cities can have car insurance costing $150-$200+ month). Gas is also near the pre-peak oil price due to the carbon tax.

    People have started to cut back on expenses and we haven’t even gotten to the part where poor/novice speculators look for financing for the glut of investment condos coming to market soon.

  25. Carl says:

    Who are the idiots buying $100,000 pickups???

  26. lenert says:

    Doesn’t classifying a vehicle as a truck exempt it from CAFE?

    • Wolf Richter says:

      I’m not sure if the US and Canada are totally synced on this. So this is for the US. CAFE goes by the vehicle’s footprint (square footage), but it has different standards for “passenger cars” and “light trucks.”

      My understanding is that the distinction between “passenger car” and “light truck” is the weight. It used to be 6,000 pounds GVWR (a rating for the maximum operating weight) but this has been raised to 8,500 pounds. So all compact SUVs (crossovers) would all be classified as “cars” under the rules though the industry markets them as “trucks.”

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