RICHMOND HILL, Ontario -

The Canadian used-vehicle market is expected to continue to show upward movement and eclipse the 3 million sales mark in 2011, according to industry analyst Dennis DesRosiers, who attributed most of this to vehicles being “so well built” these days.

Given the vehicle quality, many shoppers are entering the market on the used side.

More specifically, following a 5.9-percent increase from 2008 to 2009, used sales will likely reach about 2.88 million vehicles in 2010 before climbing to about 3.07 million units in 2011.

“The primary driver behind this is the quality of product available to consumers. They are so well built and last so long that no one wants to scrap the darn things,” explained DesRosiers, who is the president of DesRosiers Automotive Consultants.

“So what we are finding is that new consumers are using used sales as an entry point into the market (one of the reasons why entry level new sales are so soft this year), and these new consumers are expanding the penetration of vehicles into the Canadian market,” he continued.

DesRosiers went on to note that there was record increases in the number of vehicles per driving age population, and he attributes the entire uptick to the increased lifespan of used vehicles.

And the inexpensive price tags on used units has allowed for an increase in “fringe” shoppers buying vehicles, he pointed out.

DesRosiers, however, later warned that used forecasts can be subject to change, noting: “Be careful with the forecast numbers. We are in the process of updating our forecast and these numbers will change slightly in the coming week, but I did want to get something out on used since so many are asking for it.”

New-Vehicle Sales

Moving on, DesRosiers also offered an analysis of the new-vehicle market in Canada during September. To illustrate the disparity in performances among various automakers, he invoked the words of a classic author.

“To steal from Charles Dickens … ‘It was the best of times’ … Ford is up 63.9 percent, eight other OEMs are up double digits on the month …. ‘It was the worst of times’ … Toyota was down 17.1 percent, GM was down 24.3 percent,” DesRosiers highlighted.

Ford, in particular, moved 26,450 units in September, which pushed its year-to-date sales through that point to 210,370 units, DesRosiers pointed out. This marks a 21.7-percent gain over the first nine months of 2009.

The month helped to shore up Ford’s perch atop the Canadian market, DesRosiers noted.

Land Rover, though, is tops when it comes to year-to-date improvement (up 41 percent), with Audi No. 2 at 34.3 percent. Chrysler’s sales through September have climbed 29.6 percent and Subaru has jumped 24.8 percent. Ford has the most year-to-date sales, but is fifth when it comes to improvement from last year, he highlighted. However, it’s not a bad day for an OEM when it can say it has shown more than 20-percent growth, he suggested.

“But with two of the biggest OEMs (Toyota and GM) seriously underperforming the market, it results in a relatively poor overall market performance,” DesRosiers shared. “We had been tracking up about 8-9 percent this year and September ended up only 4.3 percent.

“Good but not great. The misleading part about September is that we are finally getting back to some reasonable comparables,” he continued. “So an increase of 4.3 percent actually translates into a pretty decent SAAR of 1.603 million units, which is fairly healthy market on a SAAR basis.”

Specifically, there were 135,098 units sold in September, compared with 129,503 vehicles a year ago. Through the first nine months of 2010, Canada has moved about 1.21 million vehicles, a gain of 7.2 percent from the same period of 2009.

Moving along, DesRosiers did stress some caution regarding what he believes are “massive” incentives compared to “historical” levels.

“Given the level of incentives one could actually conclude that the market is seriously underperforming relative to what it has done in the past,” he noted. “Some OEMs are hugely profitable but most are losing money with this incentive game so it is inevitable that incentives will come back to more normal levels, and when they do look for the market to correct accordingly.”