Cross-border swapping: Canadian and U.S. new car buying habits starting to blur
Hockey, poutine, strict gun controls, and universal healthcare—these are just four of the defining stereotypes of being Canadian, eh. And when it comes to buying new vehicles, we really like small cars, especially when compared to our football-obsessed, hot-dog eating, gun-toting, private-healthcare-paying, pickup truck-driving friends south of the border.
Right? Well, actually, not so much. In fact, Canadians—not Americans—have become big pickup buyers. And Americans, all of sudden, have fallen in love with small hatchbacks.The trend is so disturbing, we may need to setup a Royal Commission to look into officially swapping Canadian and American new car buyer stereotypes.
Here are the facts: For the first six months of 2011, of the 807,772 new vehicles sold in Canada this year, over 55 per cent have been trucks, SUVs or minivans—not passengers cars. The best-selling new vehicle in Canada is the Ford F Series, selling nearly two times the rate of the best-selling passenger car, the Honda Civic.
Now, overall pickup sales in the U.S. are up as well. But they aren't selling as well as anticipated, raising concerns with analysts about price wars and lower profits later in the year.
According to Ford of Canada’s Christine Hollander, those types of incentives are certainly helping to drive truck sales in Canada. Plus she thinks that the sluggish U.S. economy and the subsequent drop in personal disposable income is playing a factor as well.
“When Canadians need a truck, they get a truck. But in the U.S., the first thing to go when times are tough is the truck.”
Instead, American new car buyers seem to be turning to hatchbacks. A Detroit News report states that while “hatchbacks traditionally have been popular in Canada and Europe, [they] have not resonated well with American consumers.”
"The hatch was the vehicle for college kids with no money; and they were usually ugly [think Pinto, Gremlin and Chevette - JL]," said analyst Dave Sullivan of AutoPacific Inc. in the report.
Not anymore.
About half the retail sales of the Ford Fiesta and 41 per cent of the new 2012 Ford Focus in the U.S. are hatchbacks. And data from WardsAuto.com shows the number of hatches sold in the U.S. increased by 63 per cent for the 2006-10 model years, from 291,853 to 475,048, while total car sales fell 23 percent in that period
Do you think this trend of national car buying stereotypes will continue between Canadian and American buyers?
Or are Americans just feeling the pinch of a tight economy?
[Sources: Ford Canada, DesRosiers & Associates; Automotive News, The Detroit News, WardsAuto.com]
My guess is the tight economy is the reason hatches are on the upswing in the US of A.
The other possibility is since Hatchbacks have moved upscale (more expensive) they are no longer seen as being cheap. So the Yanks are starting to like them for their fuel economy, practicality and features. Things that Canadians and Europeans have known all along.
I have no idea why trucks are selling so well in Canada. Incentives perhaps?
Posted by: RP | July 15, 2011 at 07:43 AM
Anybody who spent a lot of time in the USA prior to the Great Recession, and goes back now will tell you that huge parts of the USA are still suffering a serious recession if not an actual depression. Drive through the residential areas of south Florida that were popular with the snowbirds and you'll see entire strip malls boarded up. That kind of economic downturn will not only cause 'personal' truck purchases to drop significantly, but it will also result in a serious drop in 'business' truck purchases. Another thing to remember is that while gas prices in the USA have risen with the price of oil, they are still significantly lower than prices in Canada. A number of years ago, fleet buyers in Canada had to adjust their buying habits to deal with rising fuel prices. Fleet buyers in the USA are finally having to deal with those same concerns - these days, if the job doesn't call for a truck or SUV, then USA fleet buyers aren't ordering them.
As for Canadians buying lots of trucks, I'd be interested in knowing how many of those trucks and SUVs were being bought for business use vs. personal use. I'd also be interested in a year-by-year comparison for hatchback vs truck sales in Canada. Is it possible that what's really happening is that 'business' truck purchasing in Canada is continuing apace, while personal vehicle buying is still down compared to pre-recession years resulting in lower civic sales compared to F150 sales?
Posted by: DJL | July 21, 2011 at 10:47 PM