Auto sales in Canada suffered a decline for seven months in October in light of the rising interest rates set by the Bank of Canada.
Auto sales in Canada see a considerable decrease for seven straight months in October as demands for new car units diminished considerably with the rise of interest rates.
According to Reuters, the total vehicle's sales made throughout the country last month were only 161,125 units, which is down by 1.9 percent from 2017.
David Adams, president of the industry governing body, Global Automakers of Canada (GAC), said that the industry has clearly been affected by interest rate hikes.
Despite the relative increase in consumer confidence measured by the Conference Board of Canada, that same confidence doesn't seem to apply in big purchases like vehicles. As Adams pointed out, these items are considered more sensitive to the upsurge of interest rates.
GAC reiterates the fact that this plummeting trend is definitely a very disconcerting negative development, especially for domestic auto manufacturers.
Weakened Sales Performances
As pointed out by the news outlet, General Motors Co, which is Canada's biggest car manufacturer, overtook Ford Motor Co. is the most number of vehicles sold in October. Despite this, GM's sales ratings plummeted down by 12.9 percent for that month.
Suffering the same fate is Fiat Chrysler, one of the major auto-makers in the country, registered a total of 14.8 percent dip in sales from last year.
Toyota's sales in Canada, however, peaked at 9.9 percent in the same duration.
GAC data further indicated that Ford's popular F-Series pickup trucks retain the recognition as the best-selling vehicle of its kind in the country.
Meanwhile, Honda Civic nabbed the top position for the passenger car segment.
In comparison, the auto sales in the United States ramped up slightly in October amidst the rising interest rates and higher vehicle prices.
Just this week, Ford Motor Co. predicted the volume of car sales will continue to follow a moderate flow within this year as consumer confidence takes a gradual decline.
Raised Interest Rates
For the fifth time in 15 months in October, the Bank of Canada raised interest rates on loans. The financial institution further announced more rate hikes will follow as the country looks to achieve its inflation target.
As previously reported here on Business Times, the latest economic situation in the country resulted in Ottawa losing its dollar's edge against the greenback.
The loonie, as the Canadian dollar is commonly known, has plunged down at its weakest point since September.
Foreign exchange analysts have been quick to attribute the currency's decline to the US dollar's resurging strength. This trend will likely to carry over for quite some time with the reported increase of US crude inventories in the prior months.
