New vehicle sales, production expected to improve again in 2024

After facing major supply chain issues during the height of the COVID-19 pandemic, the auto manufacturing industry in Canada is expected to make a rebound in 2024.

Black Book Canada's Daniel Ross, a senior manager of industry insights and residual value strategy, says automobile sales were up by a little more than 11 per cent in 2023, and he anticipates that number will continue to climb this year.

Ross is positive the supply chain issues are in the rearview mirror for auto manufacturers, as the demand for new cars remains high.

"We are well beyond the worst part of the semiconductor shortage and the supply chain shortages that saw it reach its height in 2022," said Ross. "So that’s the good news and we believe that that’s going to stay the course as new vehicle production keeps going the way it should and new vehicle sales, will improve now for the second consecutive year."

According to Autotrader, new car prices today are 22 per cent higher than they were two years ago, with the average price of a new car coming un around $67,000.

Black Book Canada says the high price of used cars dropped in 2023 and that prices should continue to drop this year as more new cars hit the market.

Ross points to the Bank of Canada pausing its interest rate hikes, saying it could drive buyers back into the new car market.

"We're seeing it fall back a little bit as they pause (interest) rates and we hear of a possible decrease on rates, probably towards the end of Q-1 and the beginning of summer," said Ross.

Overall new car prices are likely to get better says Ross but not significantly. Consumers can expect with increased production a return to greater incentives and rebates.