The auto sales industry is "often a bellweather of the overall economy" and according to one of the industry's provincial leaders "things look really good in B.C. and in the Prince George region."
Blair Qualey is the president and CEO of the New Car Dealers Association of B.C., and he was in the city on Tuesday as a delegate at the Business Development Forum run by the Prince George Chamber of Commerce.
One of the chief signs of that confidence at a local level is all the capital improvement investment made by various dealerships all over the city. Millions of dollars have been pumped into new locations, new buildings and vehicle lots, major renovations to existing locations, and almost no dealership hasn't been involved in tooling up their facilities in some way.
If that investment by the car companies isn't a strong enough sign, then the actual car sales for the Canadian market has to be, he said.
"It was a record year, the year before. We broke that record again last year. And the indications we are hearing from the people calculating the projections is, it will be another record-breaking year for new car sales again in 2016," Qualey said. "It's not just Canada. The United States market has been smashing records as well."
The Canadian dollar's monetary slump has helped pump up the earliest of 2016 numbers, because American consumers and even some dealers are coming across the border to buy on the favourable Canadian side of the fiscal border. However, he cautioned, that will have an effect on supply and demand so prices will inch up because of that.
The low Canadian dollar value is good for some industries, but "at some point along the vehicle manufacturing chain, prices have to be paid in American dollars no matter where it was built, so eventually we are going to see that cost reflected in the price tag."
That, and the currently low interest rates at the lending institutions, makes for a strong set of consumer incentives.
"We have, in Canada, one of the oldest fleets on the road. Canadians tend to hold on to their vehicles longer than other places," he said. "But there comes a time when you need a new vehicle, or a quality used vehicle, and with the prices on new ones closing the gap on new vehicles, these days a lot of people are saying well, for just a little bit more I can buy brand new, and at very low interest, and my old one needs to go. On a lot of automobile products we are seeing the lowest sticker prices in a generation, so it all makes for just a great buyers' market, and that's why we are seeing people make those purchasing decisions now. With talk of interest rates maybe going up, and the strong American dollar going to nudge up prices, it's probably a good idea to think about doing that sooner rather than later."
With the older vehicles being replaced, it is also stimulating a strong market for used vehicles. People looking to get a second car, or get one for the kids, or those needing affordability as a prime priority are all seeing the benefit of that side of the industry, as mainstream Canadian consumers upgrade their ride.
In the United States last year, they sold about 18 million new vehicles. In Canada, the sales numbers for new ones was about 1.8 million. One-tenth of those were sold in B.C. Those were all best-ever numbers.
"Generally, it doesn't matter if you are a dealer in Prince George or Terrace or Cranbrook or Langley, you tend to be upbeat, forward-looking, entrepreneurial folks who spend their day focused on satisfying the consumer side of their community while improving the social fabric of their communities," he said. "You have a lot of those in this city. The numbers here are not different than the rest of B.C. or Canada. Things are moving, the stats are good. And these days, you have the highest consumer knowledge base coming through the door to talk to you, and as a dealer, that is great, you want to have that knowledgeable consumer so you can get straight to what's important for that customer."
The dealership sector also plays a large role in the natural resource sector. No matter what your business - natural gas, forestry, agriculture, mining, construction, combinations of those things, etc. - you have to get from a lot of As to a lot of Bs. Often, company or government fleets have to be purchased.
"Despite what you hear on the news, things in B.C. are definitely moving. The economy isn't booming in every sector, but it is healthier than you might think, if what we are seeing is any indication," Qualey said.
