If you go by the numbers of auto ads on the various medias, either March will be a strong month, or its softer than expected and everyone is trying to get whatever they can out of the market.
Next week we will get a clearer picture.
The old saying "A vehicle is the second most expensive purchase next to a house". Must be a good thing that we are gravitating from ownership to mobility at a constant $500 per month.
For the past few years Canada has become a full fledged consumer economy empowered by free flowing money. We missed the bullet in the "great recession" of 2008/09 and morphed into a consumer economy.
Here is the deal...
Lean on CMS (Citizen Main Street) to consume more, empower CMS with inexpensive free flowing money to encourage him to consume even more.
The thought vector that Canadian companies were/are sitting on mountains of cash and should start investing in the Canadian economy got lost in a fog of changes. You have to wonder what happened to investing, creating jobs, to keep Canada going for the next generation.
Free flowing money has empowered record vehicle sales in Canada for the past couple of years. Yes...2014 was a record year, and this year started strong on top of a record year.
In the meantime...
The CDN dollar is in the dumpster, negatively impacting the confidence of CMS.
Price of oil is in the dumpster, with epic consequences across Canada.
Gas is not so cheap, a head of lettuce is not cheap, the same for coffee, and olive oil.
Pick up ads are touting 5 figure discounts/deals.
Vehicle sales in Alberta (3rd largest market in Canada) are steadily diminishing.
The mobility business model...
This model works well on a 24-36 month cycle, at 48-60 months most folks will have spent some money on consumables (tires,brakes,service) they are less tempted to change vehicles. If the confidence of CMS is shaken, lowered, with the current mobility model its easy to extend the trade cylce from 36 to 48 or 60 months.
As sales increase in the US with a rising tide of employment, consumer confidence, the opposite might just develop in Canada.
Month end March will be revealing.