Despite a rapidly changing automotive landscape, Canada’s vehicle fleet remains steady.
Canada has about 26.7 million light vehicles in operation. That’s up from 26.3, or 1 per cent, from 2022, according to Stats Canada data. Meanwhile, the U.S. VIO number has grown about 2 per cent since 2021.
A growth number that low indicates that at the least there’s no contraction of vehicles in Canada. But it’s not expanding a whole lot either, meaning the number of vehicles able to be maintained and serviced by the aftermarket isn’t growing.
Todd Campau, aftermarket practice lead at S&P Global Mobility described this figure as a neutral indicator at AIA Canada’s National Conference.
“It’s not growing real fast, it’s not shrinking real fast. But there are some external stimuli that are causing it to kind of stay flat,” he observed.
Campau highlighted a significant shift in vehicle preferences across North America, with a marked trend towards light trucks, including crossover utility vehicles (CUVs).
“We are seeing a rapid shift towards light trucks across North America,” he explained. “Passenger cars are essentially falling kind of off the cliff.”
Because there’s a low volume of passenger cars, that segment is aging rapidly. On the flip side, light truck age growth is staying more muted because they’re gaining more and more market share every year.
Turning to vehicle registrations, Campau provided a positive outlook, though not quite where they used to be just yet. After hitting 1.48 million unit sales in 2022, sales crept up to 1.66 in 2003, according to DesRosiers. Canada was on pace for 1.68 million units sold in April and that number has only grown to 1.78 as of September.
Slowly, numbers are going up to historical norms, Campau said. He noted that the Canadian new vehicle market showed resilience during both the pandemic and the Great Recession, outperforming the U.S. market.
“Actually, it’s a little better than what we saw in the U.S. The Canadian new vehicle market was pretty resilient,” Campai said.
Campau emphasized the importance of new vehicles entering the market for the health of the aftermarket sector.
“This is our pipeline. I know a lot of times we feel like it’s us against them; It’s OEMs versus aftermarket. And to a degree, we do battle on how to repair the vehicle,” Campau acknowledged. “But without the vehicles coming into the market, our pipeline dries up. And if our pipeline dries up in five or six years, that’s really bad for us.”
However, Campau pointed out that scrappage rates in Canada remain high, affecting the overall fleet size. Scrappage meaning any vehicle leaving the vehicle fleet, such as by end of life or exported.
“We’re still seeing pretty high scrappage. That’s a large number of vehicles that are leaving your fleet every year. It does seem like it’s recovering. But still, I’d like to see obviously a lower number to maintain that fleet growth in the upward direction,” he said.
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