September 4, 2007
Vehicle imports to Canada up in 2007, industry analyst says
Richmond Hill, Ontario – Vehicle imports into Canada are up in 2007, but are still a relatively small number compared to the overall vehicle market, says industry analyst Dennis DesRosiers. Most are high-end, expensive vehicles, where the price gap is the largest.
For the first six months of 2007, 64,096 vehicles have been imported into Canada, versus 49,709 for the same period in 2006. In the second half of 2006, an additional 63,117 vehicles were brought in.
“Imports are certainly up, but most are either used, and/or other vehicle types like trailers or motorcycles,” DesRosiers says. “We suspect that over 80 per cent of these imports are used or non-passenger-carrying units.”
DesRosiers says that some consumers are not aware that they still have to pay tax and, in some cases, the Green Levy; he gives the example of a consumer who was required to pay a $4,000 Green Levy, and ended up paying more than if he had purchased the car in Canada.
“I don’t want to underestimate the impact of vehicle imports into Canada, primarily due to the exchange rate, but like most issues, this one is also being somewhat overplayed by the industry and its watchers,” DesRosiers says. “The imports of used vehicles are definitely hurting resale vales, and thus there is a fair amount of residual value loss in the market currently and this may be the largest negative for the industry. We are going to buy over 1.6 million new vehicles in Canada this year and on the outside, maybe 25,000 to 35,000 will be imported. Not a small number, but relative to the total size of the market, also not a huge market. The biggest issue may be the residual value downside threat.”
The figures show that, with the exception of 1998, vehicle imports have risen each year, from a low of 21,111 in 1996 to a high of 112,826 in 2006. The rate of growth was also highest from 2005 to 2006, with an increase of 40,187 vehicles. The statistics include buses, motorcycles, MPVs, passenger cars, snowmobiles and snowmobile cutters, trailers, trailer converter dollies, trucks, and restricted-use motorcycles; the numbers exclude salvage vehicles, parts, and vehicles older than 15 years. Figures indicate that about 15,000 to 20,000 vehicles 15 years and older are imported annually.