Due to a challenging job market, the demand for automobiles in Canada has remained strong, supported by wage growth and pent-up demand, despite the financial burden imposed on consumers by higher rates and costs.

From January to March 2023, the sales of light vehicles showed a gradual increase, with an average of 115,000 units sold per month.

Compared to the first quarter of 2022, light truck sales in this quarter saw a year-over-year increase of 6.7%, while car sales decreased by 7% year over year.

In recent years, the production of higher-end vehicles has shifted, following the pre-pandemic consumer preferences, resulting in light truck sales outperforming the overall trend in North America.

For the year 2023, it is anticipated that vehicle sales in Canada will grow by approximately 2.4% compared to the previous year, reaching 1.6 million units. Although this represents a modest improvement, sales volumes are still expected to be lower than the pre-pandemic level of around 2 million units. North American auto production is projected to increase by 8.6% compared to the previous year, which will help alleviate supply shortages. However, a complete return to pre-pandemic levels is not expected until 2024.