Canadian auto sales remained resilient in December, up slightly (0.2% m/m sa) to 1.80 mn (saar) units, the fastest seasonally adjusted monthly pace since January 2021 according to Wards Automotive (chart 1). Seasonally adjusted auto sales resumed their trend recovery following the summer slowdown in June—sales increased in all but one month of 2023H2 and averaged 1.76 mn (saar) in Q4-2023, up 5.6% q/q—as Canadians dealt with wildfires, strikes, and additional hikes to the Bank of Canada’s policy rate.

Chart 1: Canada Light Vehicle Sales

In a year marked by elevated interest rates and inflation above the BoC’s 2% target, 2023 was a year of recovery for Canadian new light vehicle sales that increased 10.6% y/y to 1.68 mn units. There is still lots of road left to a full recovery in the auto sector as new light vehicle sales remain down by more than 10% relative to pre-pandemic volumes despite extraordinary population growth. The rebound in sales was primarily concentrated in light trucks, which increased 12.2% y/y to 1.42 mn units, as opposed to sales of cars which increased 2.3% y/y to 267,000 units (chart 2). And within the car segment, sales of luxury cars increased by the greatest percent in year-over-year terms (21.5% y/y), accounting for just over one-in-four car sales.

Chart 2: Canada New Car and Light Truck Sales

The divergent recovery by vehicle type was aided by the increased North American production and inventories for larger vehicles, which recovered faster as manufacturers likely prioritized their initially constrained production to these higher margin vehicles that consumers wanted (chart 3). We are expecting further rebalancing within the auto sector this year amid still improving production and inventories, while elevated interest rates continue to weigh on new light vehicle sales in the near term (chart 4).

Chart 3: North American Light Vehicle Production; Chart 4: Canada Interest Rates

Our outlook for Canadian auto sales expects continued albeit slower growth to 1.71 mn units in 2024 and 1.78 mn units in 2025 as inventory levels improve and rates pressures ease.


US auto sales increased 3.2% m/m (sa) to 15.8 mn (saar) units in December, rounding out Q4 which averaged 15.5 mn (saar) sales (-0.9% q/q), for a second consecutive quarterly decline (chart 5). Momentum in the trend recovery of US auto sales stalled in the second half of 2023, resulting in annual sales of 15.5 mn units for the year. While total new light vehicle sales increased 12.4% y/y from 13.8 mn in 2022, annual sales remain 9% below 2019 levels.

Chart 5: US Light Vehicle Sales

Sales of new light trucks increased 13.5% y/y to 12.4 mn units, recovering to pre-pandemic levels and surpassing the 12.2 mn light trucks sold in 2019 (chart 6). Meanwhile, the recovery in sales of cars, which increased 8.3% y/y to 3.1 mn units, remain nearly a third below pre-pandemic levels as a rebound in production and inventories growth begins to ease supply-side constraints.

Chart 6: US New Car and Light Truck Sales

Higher interest rates posed further headwinds to demand-side factors. The average 48-month new car loan rate reached 7.7% at the end of 2023, surpassing the previous peak from 2009 as hikes to the Fed’s policy rate and tightening financial conditions drove up financing costs (chart 7).

Chart 7: US Interest Rates

Our outlook for US new light vehicle sales forecasts an increase to 16.2 mn in 2024 and 17.0 mn in 2025 as inventory levels continue to improve and rates pressures ease.


Global auto sales declined marginally in November 2023, -0.3% m/m (sa), as sales at the regional level were mostly flat or down in seasonally adjusted terms (chart 8). Auto sales in Western Europe were in line with the global average at -0.3% m/m (sa), remaining slightly above 11.5 mn (saar) units on a three-month moving average since April 2023, though still below the 14.1 mn units sold in 2019. Despite eight of the 15 countries covered seeing positive seasonally adjusted growth, higher sales in major markets such as France (2.2% m/m sa), Italy (1.3%), and the UK (1.2%) were offset by declines in Germany (-1.9%) and Spain (-5.2%). Meanwhile in Eastern Europe, auto sales eased from the recent peak by -2.1% m/m (sa) to 3.1 mn (saar) units, the second fastest seasonally adjusted monthly pace since mid-2021. The pace of Asia Pacific auto sales continued to hold steady at the regional level (0.2% m/m sa), albeit slowing in four of the six countries covered. Increased sales in China (2.0% m/m sa), which accounts for two thirds of Asia Pacific sales, and South Korea (2.7%) were offset by declines in Australia (3.1%), India (-6.9%), Indonesia (-0.4%), and Japan (-1.3%). Seasonally adjusted auto sales in Latin America fell -5.0% m/m (sa) in November, remaining volatile on a monthly frequency, increasing in Colombia (21.9%) and Mexico (3.8%), but decreasing in Chile (-3.7%), Peru (-7.3%), Brazil (-7.9%), and Argentina (-26.2%). Our outlook for global auto sales is that the pace of growth will slow from an estimated 10.6% in 2023 to 3.9% in 2024 and 3.3% in 2025 as elevated interest rates weigh on global consumer spending and economic activity (chart 9).

Chart 8: Global Vehicle Sales by Region; Chart 9: Regional Contributions to Growth in Global Auto Sales
Table 1—Global Auto Sales Outlook (mns units); Table 2—Provincial Auto Sales Outlook (thousands of units ann.); Table 3—North American Annual Production Outlook
Quarterly Outlook for North American Auto Sector Chart 1: Canadian Light Vehicle Sales, Chart 2: US Light Vehicle Sales, Chart 3: Wards North American Auto Production Outlook; Table 3—North American Annual Production Outlook