Car Sales Drag On Recovery

Based on Canada's vehicle sales results for the year so far and potential supply issues for the country's best-selling car, we revised our sales forecasts downwards in our Q411 report, to show passenger car sales ending the year down by around 2%. Results for August and the first eight months combined are in line with this view. Passenger car sales fell 0.1% y-o-y in July, leaving segment sales for 8M11 down 1.6% y-o-y. On the other hand, light truck sales have rebounded, with sales up 5.8% in August and 4.6% in 8M11. We have raised our forecast for light trucks given the strength of the rebound in recent months, although, given the traditional pattern for sales to slow down in the latter months of the year, we project growth of 2.5% by the end of the year.

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