Boston, MA -- (ReleaseWire) -- 04/11/2014 -- Despite concerns that early signs of a slowdown in the Canadian housing market provided a risk to growth in light truck sales, the segment carried total light vehicle sales to another year of positive growth in 2013 with the segment's sales up 6.9%. This contributed to growth of 4.0% for total light vehicles, which reached a record 1.74mn units, surpassing the last record set in 2002.
Based on an improving GDP growth outlook for 2014 and 2015 (2.1% and 2.3% respectively, compared with our estimate of 1.7% for 2013), coupled with a slightly better than expected year for sales in 2013, we revised our forecasts upwards for the next two years in our previous report and maintain those forecasts for 2.7% growth. We expect the light truck segment to continue its outperformance of the passenger car segment going forward. The downside risk, however, remains the potential for a crash in the housing market, which is one of the biggest drivers of the segment.
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On the private consumption side, conditions also appear favourable (with steady unemployment and low inflation), and we believe the increasing uptick in consumer confidence will support the market with steady if not spectacular growth over the forecast period. One downside risk, however, is the beginning of a deleveraging of the Canadian consumer, which could reduce the number of sales financed by credit or leasing. Nevertheless, we expect average annual light vehicle sales growth of 2.8% from 2014 to 2017.
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