Following a slowdown in new vehicle sales in Canada over the past two quarters, the new vehicle market rebounded in November, showing a 2.4% increase compared to October, according to Scotiabank’s monthly automotive report.

After experiencing a downturn between May and September 2024, Canada’s automotive industry continued its positive momentum that began last October. New vehicle sales surged by 3.5% in October compared to September, marking a record month-over-month increase for the current year.

Despite rising unemployment rates, new vehicle sales continued to climb in November across Canada. Last month, the Seasonally Adjusted Annual Rate (SAAR) reached 1.89 million units, representing the strongest November performance since 2017.

The Bank of Canada’s key interest rate reduction from 3.75% to 3.25% on December 11 has evidently stimulated automotive sales. The industry is expected to continue its progression toward pre-pandemic levels.

However, the steady increase in unemployment, which reached 6.8% in November 2024—a peak since 2021—could hamper the automotive industry’s progress. Additionally, Donald Trump’s recent rise to power may create obstacles for the Canadian automotive sector, as he has expressed intentions to implement new tariffs on imports from the United States.

Therefore, we shouldn’t be too quick to celebrate these encouraging results reported by Scotiabank, as 2025 could prove to be a highly volatile year for the country’s automotive industry.

Even More Encouraging Results Elsewhere in the World

In the United States, November saw the highest seasonally adjusted annual rate since May 2021, reaching 16.5 million units sold. Consequently, there has been a reduction in vehicle inventory accumulation at American dealership lots, continuing the downward trend in this segment.

Our southern neighbours are witnessing their automotive industry returning to its pre-pandemic glory: fewer vehicles are sitting in dealership lots, and sales are increasing.

With an unemployment rate of only 4.2% in November and a key interest rate reduction of 0.75 percentage points since September (from 5.5% to 4.75%), the United States appears to be on the right track. Scotiabank’s report forecasts that vehicle sales on American soil will increase by approximately one million units in 2025 compared to 2024.

In Europe, 14 of the 15 countries studied by Scotiabank reported increased sales in November, with Germany leading the pack with a 12% rise in its seasonally adjusted annual rate between October and November.

In Asia, November was also very beneficial for the automotive sector compared to October, showing an average increase of 6.1%. India, however, presented the best monthly performance with a 10.5% increase.

Finally, Scotiabank’s report concludes by forecasting an average monthly growth in the seasonally adjusted annual rate of 3.3% worldwide, a positive result considering the current global economic instability.