Report: Canadian Dealers Sell New Cars Quicker

November 20, 2009

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TORONTO, Ontario — In conjunction with a stronger new-car sales environment, turn rates for Canadian dealers have sped up, according to a Financial Post analysis posted on the CBC Web site this week, which also indicated that the country's total new-vehicle sales for 2009 might not be as soft as initial projections forecasted.

In fact, the report, citing analysis from J.D. Power and Associates' Power Information Network, indicated that October's turn rate was 51 days, marking the quickest pace in five months.

The analysis pointed out that spring and summer saw sluggish turn rates, but in August, this started to change, eventually growing faster in September and October.

One PIN official quoted in the report suggested that this is a good sign that the market is recovering. What's more, Financial Post indicated that this sales pickup points to full-year results that will, perhaps, "not be as bad" as first thought.

Specifically, the report points to data from DesRosiers Automotive Consultants that projects full-year sales of 1.45 million new vehicles in Canada, which would be down 11 percent year-over-year.

The DesRosiers data also predicts that growth will be rather slow in the next few years, and that the market could be "lean" for the next three to five years.

This, coupled with the Big 3's drastic drop in market share, will likely spur more rational dealer body levels, the report noted, citing Dennis DesRosiers, president of his namesake's company.

Specifically, among the 3,450 dealers, 500 to 600 dealers likely won't make it, according to DesRosiers. However, some may switch over to other brands or simply specialize in used sales.

AR Canada