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New vehicle sales put on the brakes

New vehicle sales put on the brakes

Posted on: 6/29/2018 | Author: ATB Financial's Economics + Research Team

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This weekend's convoy of Canada Day long weekend road trips is sure to include a few shiny, new cars, trucks and vans. According to Statistics Canada, the number of vehicles sold in Alberta in April was up about six per cent from March. Total sales reached $1.0 billion and amounted to 22,417 vehicles.

Seasonality can explain much of the monthly increase in April. After all, people are more likely to buy a new vehicle when the snow stops falling and the trees start blooming. But, while sales growth improved over the course of the month, the number of cars and trucks that drove off dealership lots was down by close to five per cent from last year, a trend that’s continued for three months.

Last year, the number of new cars sold grew significantly—around ten per cent—compared to 2016. This was largely driven by increasing wages, a recovering economy and pent up demand amongst people who were eager to upgrade from their older models. This year, lower in-migration, rising prices and more expensive lending (higher interest rates) will continue to pump the brakes on new vehicle sales in the province.

New vehicle sales, graph

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