January 22, 2007

Annual sales of Canadian luxury vehicles drops for first time since 1990

Toronto, Ontario – Sales of luxury vehicles have faltered for the first time since 1990, says auto analyst, Dennis Desrosiers. Total luxury sales were down slightly to 139,015 units a drop of 0.3 percent, the first decline in more than 15 years. This caused a small decline in the share of luxury vehicle sales in Canada to 8.6 percent of the total market from 8.8 percent of the total market in 2005. The share of Luxury vehicles in Canada was only 3.1 percent in 1990 and last year’s slight drop in share was the first since that year.

In addition, buyer’s preferences in luxury vehicles have shifted since 1990. During the 1990’s the luxury market was concentrated in ‘High Luxury’ models which peaked in 2000 at 35,341 units. The High Luxury segment has fallen on hard times dropping to only 23,423 units in 2006 a decline of 7.9 percent from 2005 and some 12 thousand units below their peak. The best selling High Luxury model in 2006 was the Acura TL and the Mercedes-Benz C-Class a very close second place.

Desrosiers says many of these luxury intenders have moved over to Luxury Sport Utility vehicles which over the same timeframe have grown by about 25 thousand units. This segment was up by 5.7 percent from 2005 to 45,985 units. The best selling Luxury SUV last year was Lexus RX. The other growing luxury segment is Small Luxury or what might be called entry-level luxury, such as the BMW 3 Series, Lexus IS, Infiniti G35, Audi A4, and Cadillac CTS. This segment also includes vehicles like the Chrysler 300C and the Ford Five Hundred. Last year, the best selling Small Luxury vehicle was the Chrysler 300C, followed by the BMW 3 Series

Luxury Sport Cars took a heavy hit in 2006 down 13.5 percent to only 6,369 units in 2006 and only 0.4 percent of the total market. This is down from a peak sales performance of 8,204 units in 2004. The best selling Luxury Sports Car last year was the Mazda RX-8.

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