Bank of Montreal : Canadian Auto Sector Recovers; Some Positive News Ahead in 2012-BMO

TORONTO, ONTARIO--(Marketwire - Jan. 10, 2012) - The Canadian auto sector has recovered and will provide some good news in 2012 for prospective buyers as manufacturers introduce redesigned models at competitive prices, according to BMO Economics.

"There will be a noticeable push as auto makers vie for increased market share," said Doug Porter, Deputy Chief Economist, BMO Capital Markets. He forecasts the Canadian dollar will hover around parity against the US greenback, while Canadian auto sales will dip slightly this year to 1.56 million units from 1.58 million in 2011.

Mr. Porter noted that Canadian auto sales for 2011 were up 1.8 per cent, with December's year-over-year rise at 2.6 per cent. "Canadian sales have seen much less drama in recent years compared to the volatility seen in the United States. Sales never fell as far, and were much quicker to return to normal."

Overall, Japan-based vehicle manufacturers are looking to regain some market share following weaker sales due to a shortage of supply last year caused by the earthquake and tsunami in Japan and flooding in Thailand.

Robert Sadokierski, Head of Dealership Financing for BMO, expects auto manufacturers will be offering more incentives for consumers. "There is good news for buyers on all fronts as companies roll out redesigned models in the compact, mid-sized and luxury segments."

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