It was easy to predict that 2020 was going to be a challenging year for automotive sales. After an optimistic start in January and February following a 1.92-million-unit year in 2019, COVID-19 lockdown measures ravaged the industry through the second quarter. As a result, 2020 saw the second-largest year-over-year sales drop on record by landing at 1.55 million units, a difference of 20%.
In spite of this, there were bright spots and key takeaways among the handful of segments that performed better than the industry average last year. These up-and-coming segments, according to data from DesRosiers Automotive Consultants, highlight where consumer interest is headed and which important sales trends are worth monitoring as they roll over in 2021.
Small Pick-ups: +11.1%
Small pick-ups may finally be having their moment: this was the only sales segment that showed a year-over-year gain in Canada through 2020. This is likely in part due to a shortage of large pick-ups as dealers scrambled to find inventory in the second half of the year. But there’s also a group of buyers who are realizing that today’s smaller pick-ups are roughly the same size as their dad’s Ford F-150s were and that the capabilities and proportions of small pick-ups meet their needs just fine. With both the Nissan Frontier and the Honda Ridgeline due to land with redesigns sometime in 2021, momentum in this segment is building and beginning to reveal significant potential.
Subcompact SUVs: -4.4%
Move over, city cars: it’s the subcompact SUV that’s the darling of today’s urban customers. Dealers in city centres reported not being able to get enough of these tiny crossovers to meet demand. Hyundai Canada stated that the Kona nameplate surpassed Elantra and Tucson to become its best-seller in 2020. The new Kia Seltos was that brand’s second-best-selling nameplate last year despite not having a full 12 months of sales following a spring launch. The updated Subaru Crosstrek began setting monthly sales records immediately upon its arrival in the autumn. And there are more even success stories where those came from. Hatchback-like proportions and access to all-wheel drive are increasingly important factors for the Canadians who are turning away from passenger cars and into crossovers and light trucks like these, reportedly at a ratio that now exceeds 80 percent of sales overall.
Large Pick-ups: -9.7%
This figure could likely have been much more positive had there been more inventory on the ground to sell. The large pick-up truck segment remains one of Canada’s most reliable, and with the pressures on the wholesale market beginning to ease early in 2021, there may be a chance to capitalize on some pent-up demand, especially in truck-dependent regions such as Alberta and the Prairies. Between the updated Ford F-150, the discontinued Nissan Titan, and the new halo models grabbing headlines in between like the Ram 1500 TRX, this will be an especially interesting segment to track in the coming months.
Compact SUVs: -18.8%
While it’s perhaps surprising that Canada’s largest sales segment didn’t see a stronger performance in 2020 – here’s another group of products dinged by inventory woes – it’s not at all a shock to see it draw results better than the industry average. The Canadian-built Toyota RAV4, available in gas-only and hybrid variants, topped the chart at nearly 68,000 sold, with the nearest competitors well back in the Honda CR-V (~50,000 units) and the Mazda CX-5 (~30,000 units). The arrival of the new Nissan Rogue, a consistently top-five seller that has received positive early reviews, is likely to shake things up in this already-hot segment as the year goes on.
While there’s still some uncertainty in the market, one thing remains clear: inventory acquisition should remain a crucial part of your strategy in 2021. Pay attention to trends and data like the above, and make sure you understand the demand in your local market before sourcing new types of inventory so you’re not wasting any money.
CarGurus’ Market Analysis tool, available to all customers in their dashboards, is one example of a source of data on local market demand. Use whatever sources you have access to that can provide insight into what consumers are searching for and how that compares to available inventory in your area.