N.L. and Quebec, fuelled by pent-up pandemic demand, leading the way in auto sales growth
June sales in both provinces 8.8% higher than last year's figures
The auto sales sector in Newfoundland and Labrador roared back to life in June, with drivers flocking to dealerships in search of that new car smell after months of coping with a pandemic.
Kevin Peters, chief operating officer of Hickman Automotive Group, which operates 13 dealerships in the province and employs some 500 people, said people were excited to get out and talk to other people.
"There was certainly a heightened sense of energy. There was a real positive vibe going on," he said.
Data obtained by CBC News reveals that only two provinces — Newfoundland and Labrador and Quebec — recorded sales numbers in June that were higher than the same month in 2019.
Observers are struggling to explain such a scenario in a province in the grips of a financial crisis, with key industries such as oil and gas slumping badly, an unemployment rate north of 16 per cent, and tens of thousands of workers getting by on emergency benefits or wage subsides from the federal government.
Peters said it's evidence that Newfoundlanders and Labradorians love their vehicles, that consumer confidence is recovering, and that strict physical distancing and cleanliness precautions being taken by the industry is giving consumers the comfort they need to return to dealer showrooms.
He said the provincial government's response to the global pandemic also deserves some of the credit, with tight restrictions that kept the number of infections low.
As with a boom in the home renovation sector, it's possible travel restrictions outside of Atlantic Canada are prompting people who would otherwise spend thousands on vacations to invest in new vehicles.
It all came together to create a "phenomenal" month for the industry, and July, though not quite as frenzied, is also looking good, said Peters.
"Newfoundlanders just seem to be a resilient group of people, and the business community has adapted to provide the services and the goods in a way that works for them and allows the business to go on day-to-day and consumers to interact."
Sales in provinces such as Nova Scotia, Ontario, Alberta and British Columbia were down between 22 and 33 per cent, with overall Canadian sales down by nearly 16 per cent.
Newfoundland and Labrador and Quebec, however, bucked that trend, with sales in both provinces up by 8.8 per cent, with 3,523 and 46,637 sales, respectively, according to data compiled by Desrosiers Automotive Consultants.
Analysts with Desrosier described both provinces as "standout performers," with pent-up demand driving the surge.
"As pandemic measures and reopening schemes continue to vary from region to region, this type of mixed performance may well continue in the coming months," Desrosier stated in its monthly provincial sales summary.
For Newfoundland and Labrador, that's a dramatic recovery from April, when only 902 passenger vehicles were sold in the province, compared with 2,800 the year before.
The revival follows an unprecedented shutdown of non-essential businesses in March, and warnings for citizens to stay at home as much as possible in order to prevent the spread of the COVID-19 virus.
The restrictions forced dealerships to close their showrooms, and many adapted by shifting their sales efforts online.
Inventory crunch on the way?
Industry insiders say the situation might change as the summer wears on and dealers struggle to beef up already thin inventories caused by extended shutdowns at many manufacturing plants.
Parking lot inventory that ballooned during a nearly two-month collapse in business this past winter and spring is being sold off, and dealers are starting to feel the pinch because the flow of new stock, and even parts, has not returned to pre-pandemic levels.
"We're managing that as best we can," said Peters, "but it is going to be a concern as we get through the next couple of months. There's not a lot we can do other than ask for what we need and hope for the best. Manufacturers are only going to be able to deliver what they can deliver."