Auto sales and profitability up for Canadian car dealers: PwC/DesRosiers report

Dealers optimistic about North American brands and traditional gas vehicles

TORONTO, Feb. 8 /CNW/ - Canadian auto dealers are reporting an estimated 12% market increase in 2010 and solid profits are expected to continue in the next decade, according to the 2010 Trendsetter Survey released today. The annual survey of new Canadian car dealers is conducted by PwC, DesRosiers Automotive Consultants Inc. and Seguin Advisory Services. 

Sales increase for Canadian car dealers

  • Dealers reported new vehicle sales for 2010 are up 9% and they expect the market to increase 7- 8% in 2011.
  • In 2010, small market dealers reported a 20% increase in sales compared to only a 3% increase for large market dealers that sell more than 1,000 units per year.
  • Dealers are optimistic about future sales volumes of alternate fuelled vehicles, forecasting consumers will buy 14% more vehicles this decade than last.

"Auto manufacturers are getting their groove back and more consumers are buying new vehicles, which are two positive factors impacting Canadian car dealers," says Terri McKinnon a partner in PwC's automotive practice. "The industry saw an overall recovery in sales, but more importantly, profitability is also increasing which indicates measures taken by dealers during the downturn are paying dividends."

Gas vehicles will still dominate this decade

Dealers believe Canadian consumers aren't buying into alternative fuel vehicles. In fact, the survey forecasts conventional gas vehicles will still account for 96% of light-vehicle sales this decade.

However, most are optimistic about diesel-powered products, and believe that gas-electric hybrids will break through this decade and more than quadruple in sales. At the same time, dealers don't see plug-in electric as the vehicle of choice for the coming decade, predicting only 50,000 will be bought over the next 10 years.

Ford, GM jump to 'best positioned brands'

This year, Ford overtook the top spot as the "best positioned" brand in the market from Toyota/Lexus, which has fallen to third place.  GM made the biggest jump this year moving to second place from eighth place last year.

"The shakeup in rankings is in part explained by the product recalls that plagued Toyota throughout 2010, which explains their drop to third place," says Dennis DesRosiers, President of DesRosiers Automotive Consultants Inc. "For GM, dealer consolidation has appeared to be paying dividends given the company's sharp rise to second place."

Overall, dealers are negative about the prospects from Fiat as a brand in Canada and more than half indicated that Fiat does not add value to Chrysler branded stores. Instead, the majority of dealers seem to be favouring Chinese and Indian brands over Fiat.

2011 Canadian International AutoShow

PwC's National Automotive team is available for comment regarding auto trends and issues currently affecting the industry during the 2011 Canadian International AutoShow taking place February 18, 2011. Please contact Kiran Chauhan, (416) 947-8983, kiran.chauhan@ca.pwc.com or Jessica Draker, (416) 869-8723, jessica.l.draker@ca.pwc.com for more information.

To read the full survey, please visit: www.pwc.com/ca/trendsetter. The report is also available from the media contacts.


PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country.

"PwC" is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.

Note to Editors: PwC has changed its name from PricewaterhouseCoopers to PwC in the fall of 2010. 'PwC' is written in text with a capital 'P' and capital 'C'. Only when you use the PwC logo is the name represented in lower case.

"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.


SOURCE PwC

For further information:

Kiran Chauhan, PwC
Tel: 416 947 8983
email: kiran.chauhan@ca.pwc.com

OR:
Jessica Draker, PwC
Tel: 416 947 8983
email: jessica.l.draker@ca.pwc.com


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