Majority of Canadian’s choose subcompact cars, compact cars, compact SUVs, and small pickup trucks.
Nicolas Van Praet - Financial Post - Mar. 05, 2007
2007 Toyota Corolla LE - Over 1,000,000 Corolla’s have been sold in Canada since its introduction.
You’ve seen them on Canadian streets for years in ever-growing numbers -- compact cars like the Honda Civic and Mazda3, subcompacts like the Toyota Echo hatchback, and baby-SUVs like Ford’s Escape. Now the newest of those mite-sized vehicles are the majority.
For the first time since car dealers opened for business in Canada, more than half of all retail buyers bought a small, fuel efficient vehicle last year, new research shows.
The data, compiled by DesRosiers Automotive Consultants, suggests most Canadians are already making the kind of auto-buying choices that will reduce their footprint on the environment. And it means that if the federal and provincial governments really want to make a difference to reduce vehicle emissions, they should focus on getting older beaters off the road instead of targeting new cars and trucks, the consultancy says.
Exactly 50.7% of new vehicle buyers in Canada in 2006 snapped up a so-called entry level vehicle, DesRosiers research shows. That includes subcompact cars, compact cars, compact SUVs, and small pickup trucks. The percentage, building in recent years, jumped dramatically in the past decade. Just over 34% of buyers bought small vehicles in 1997.
“This makes a very strong case that consumers are being very responsible with their vehicle purchases when it comes to the climate-change agenda,” said industry analyst Dennis DesRosiers, who heads the firm.
DesRosiers went further, saying he believes most Canadians who are buying larger vehicles are doing so out of need, not want.
“I suspect that the 25% who bought a mid-sized vehicle didn’t have a choice,” he wrote in a report. “Tell a soccer mom to buy a new Toyota Yaris instead of a new Toyota Sienna minivan and they will tell you to take a hike.”
The number of Canadians making a “less than responsible” choice when it comes to buying a new vehicle -- that is, buying a gas-guzzling SUV when they could be buying something smaller or more fuel-efficient -- is very small, DesRosiers said. He estimated it could be as low as 10% to 15% of new vehicle buyers. Only 11,888 consumers bought a big SUV in Canada last year, representing less than 1% of 1.3 million vehicles sold.
DesRosiers’ research is backed up by other sources. According to J.D. Power & Associates, four-cylinder engines, found in the smallest vehicles as well as some family sedans like the Camry, now account for one out of every two new vehicles sold in Canada.
J.D. Power says the small vehicle market will continue to expand, with premium compact vehicles projected to grow most by 52% from now to 2012. That’s one reason manufacturers like BMW AG are introducing smaller, high-end vehicles to Canada. BMW will bring its 1-series here next year. The company’s Mini has the hottest retail turn rate of any brand in the country, J.D. Power says.
In general, Canadians have always bought smaller vehicles than Americans. One reason for that is with lower disposable incomes, they can’t afford the priciest products. Automakers offering reliable vehicles at competitive prices have always done best here. Toyota recently announced it has just sold its one millionth Corolla in Canada. The compact car’s price starts at $15,785.
But the shift toward smaller vehicles is not only about sticker price, said Vik Singh, chief economist for the Canadian Automobile Dealers Association. It’s also about operating costs like gasoline -- and demographics.
“Families are getting smaller and the population is ageing,” Singh said. “If I’m only going to have one kid instead of having three kids, I don’t need a [minivan].”