Canada set to weather auto market downturn: analyst

Wed Feb 20, 2008 3:30pm EST
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TORONTO (Reuters) - Sales in the auto market are set to fall slightly over the next couple of years, but the slowdown will be less pronounced than in the U.S. market, a top Canadian auto analyst said on Wednesday.

Auto sales in Canada are expected to fall to 1.629 million units in 2009 from 1.69 million units in 2007, Dennis DesRosiers, head of DesRosiers Automotive Consultants Inc, said in a research note.

Sales are seen recovering to 1.658 million units by 2012, he said.

While the North American auto market appears to be going through a cyclical downturn, Canada's market has so far remained quite robust, he said.

Auto sales in the North American market as a whole slipped 3 percent in 2007 from the previous year, and are expected to fall further through 2009 before starting to recover, DesRosiers said.

But all of the declines came in the United States and Mexico, which were both down 3.5 percent for the year.

Auto sales in Canada actually rose 1.5 percent in 2007, recording their second strongest year on record, due to a solid domestic economy and the rise in value of the Canadian dollar.

During the year, U.S. auto production fell by 4.5 percent, while auto production in Canada rose 0.3 percent.

"This increase in vehicle production belies all the pundits who insist that Canada is in crisis mode," DesRosiers said.   Continued...