TORONTO — Look for solid growth from the Canadian and US automotive industries this year, says a BMO report.
BMO Economics is predicting a strong finish in 2013 with a 7% increase to 17.5 million units sold, and with such a notable pick-up in consumer spending, manufacturing sales are expected to accelerate.
The momentum was building last year with Canadian auto sales increasing 5.5% in 2012 from 2011’s sales. November sales were up 6.5%, adding to a yearly total of $98.6 billion compared to $92.6 billion in 2011.
US auto sales increased 15% from 2011 with year-end sales at dealerships and auto parts stores reaching US$891 billion in 2012 – an increase of 7.7%.
BMO Capital Markets economist Alex Koustas said the solid domestic market positions North America as an attractive location for auto manufacturers to invest in for 2013.
“The recent growth suggests automakers will continue to expand capacity and increased technological developments in North America – a trend we expect to continue in the coming years,” he said.
Investments on both sides of the border include a $250 million commitment from Prime Minister Stephen Harper and a US$600 million investment in a General Motors plant in Kansas City, Ka.
Koustas noted that numerous technological innovations have been made over the past four years, most notably related to greater fuel economy, and compact and midsize vehicles are now adopting amenities that were reserved for upper-market counterparts. The luxury segment, however, has been the fastest-growing and most profitable area for manufacturers over the past four years.