Canada’s auto industry reported a collective 20-per-cent decrease in new vehicle sales in 2020.
End of story? Not quite. As the months slipped by following Spring’s predictable collapse, auto sales recovered quickly.
By the fourth quarter, sales volume was tracking almost on pace with 2019 levels. How? The best-selling vehicles, not surprisingly, had a lot to do with it. Canada’s 10 most popular vehicles are increasingly dominant. Certain brands – namely Kia (up 12 per cent in Q4), Mazda (up 8 per cent in Q4), and Subaru (up 6 per cent in Q4) – also powered the industry forward.
But the most straightforward way to locate the industry’s strengths and weaknesses requires a look at entire segments. Which sectors of the Canadian auto market increased their market share in 2020, and which sectors saw their slice of the pie shrink?
Even with a one-fifth drop in sales equal to nearly 400,000 lost units, two segments actually found more buyers in 2020 than in 2019. On the flip side, full-size sedans (which didn’t have much market share left to lose) suffered a 73-per-cent decrease in Canadian sales volume. Three other passenger car segments also lost more than 40 per cent of their volume, shrinking at more than twice the rate of the market at large.
We’re choosing to highlight the Canadian auto industry’s shifts by scanning all segments for 2020’s five largest market share increases and decreases. Surprises are few and far between.
Canada’s leading premium auto brands suffered greatly as a result of COVID-19’s shutdowns in 2020. In an industry that was off 2019’s pace by 20 per cent, BMW was down 31 per cent, Mercedes-Benz’s luxury division was down 25 per cent, and Audi took a 23-per-cent hit.
The bright light for premium brands was the increased strength of their most affordable utility vehicles – combined sales of vehicles such as the Audi Q3, BMW X1, Mercedes-Benz GLA, and Lexus UX were down just 2 percent. That means market share ticked up by a quarter point to 1.4 percent.
Despite everything that was inflicted upon the year known as 2020, two vehicle segments actually produced more Canadian sales in 2020 than in 2019. The seven-strong midsize pickup truck segment was one of those. Sales rose 11 per cent to 45,854 units, enough to drive market share up by 0.8 percentage points. The segment’s top seller is the Toyota Tacoma, which produced all-time record sales of 14,376 units.
When you hear large SUV, don’t think Chevrolet Suburban or Ford Expedition. Those are full-size SUVs based on full-size pickups. The large SUV/crossover segment includes established players such as the top-selling Ford Explorer and hot newcomers such as the Hyundai Palisade and Kia Telluride. In a weak market, large SUVs were down just 3 per cent to 83,000 units in 2020, enough to grow market share by just under a point to 5.4 per cent.
Full-Size Pickup Trucks
Canada’s highest-volume vehicle category is no longer compact cars or compact SUVs/crossovers. Six full-size pickup truck nameplates generated 327,228 sales in 2020. That’s down from 362,494 in 2019, but it was enough to grow the category’s market share from 18.7 per cent in 2019; to 21.1 per cent in 2020. In fact, four of Canada’s five top-selling vehicles in 2020 were full-size trucks: Ford F-Series, Ram P/U, Chevrolet Silverado, and GMC Sierra.
Subcompact crossovers now produce just as much market share – 10.5 per cent – as compact cars. And while the compact car segment is constantly losing candidates, the subcompact crossover segment is repeatedly adding new options. Numerous brands field multiple options, such as the Mazda CX-3 and CX-30 or Nissan Kicks and Qashqai. The segment is led by the Hyundai Kona, which has a low-end Venue partner as well. Subcompact crossover sales rose 4 percent to 163,000 units in 2020.
Few automakers want to participate in Canada’s collapsing subcompact car segment. The discontinuation of the Fiesta, Yaris, Fit, and Accent mean Canada’s four top-selling auto brands (Ford, Toyota, Honda, and Hyundai) are all out. Only 22,000 subcompact cars were sold in Canada in 2020, slightly more than half of 2019’s total. That’s just 1.4 per cent of the market, down from 2.1 per cent a year ago. About 94,000 subcompact cars were sold in Canada in 2014.
The rapid decline of North America’s intermediate sedan category is well chronicled, and 2020 was intent on keeping the trend alive. Midsize cars produced barely more than 50,000 sales and market share fell by 0.7 percentage points to just 3.3 per cent (this is a broad interpretation of the category, including comparably priced hybrids such as the Toyota Prius and Hyundai Ioniq).
The Toyota Camry, Canada’s top-selling midsize car, produced strong fourth-quarter results (relatively speaking) but even the Camry ended the year down by more than a quarter. One-fifth of Canada’s midsize car volume is produced by the Camry.
Small Luxury Cars
It’s not a big segment to begin with — only around 60,000 sales were produced by this historically German-dominated category in 2019. In 2020, the BMW 3 Series and Mercedes-Benz C-Class and Audi A4 and a wide variety of rivals suffered some of the worst declines in the industry.
The category was down 43 per cent, a loss of roughly 26,000 units. Market share slid by nine-tenths of a percentage point to 2.3 percent. Some of the worst year-over-year decreases in the category belonged to the BMW 4-Series (down 58 per cent), now-discontinued Jaguar XE (down 51 per cent), Lexus IS (down 46 per cent), and the Infiniti Q50 (down 44 per cent.)
This will come as a surprise to staunch believers in the future strength of the utility vehicle market. Canadian market share for the compact SUV category, dominated by the Toyota RAV4 and Honda CR-V, slid by more than a point to 19.2 per cent in 2020. It’s now the second-biggest segment, down from the top spot a year ago.
For a number of months, tight inventory on the two Canadian-built segment leaders (which account for one-in-three segment sales) hindered the category, but competition from the the hot subcompact segment poses an issue for compact SUVs as well. Just under 300,000 compact utilities were sold in 2020, compared with roughly 163,000 compact cars.
As the sales volume disappears, the competitors drop off the map. And as the competitors drop off the map, the sales volume disappears. This isn’t a chicken-and-egg scenario, it’s more of a self-fulfilling prophecy that’s quickly leading to a handful of high-volume small sedans fighting over one-tenth of the market.
Compact cars, led by the Honda Civic and Toyota Corolla that produce just under half of the category’s volume, generated just 10.5 per cent of Canadian auto sales in 2020. That’s down from 13 per cent in 2019, the worst drop of any new vehicle segment. In 2016, compact cars generated 17 per cent of all Canadian auto sales.
This content was originally published here.