COVID-19 takes huge bite out of new vehicle sales in Nova Scotia

Nova Scotia car dealerships are reporting a 53 per cent dip in new car sales for the first six months of 2020, compared to the same period last year, while truck and SUV sales are down 36 per cent.

During a time when sales of boats, RVs, ATVs and homes are surging, the same is simply not happening in the retail auto business.

"I think what we're seeing is a six-month number that's been strongly affected by a spring selling season which was largely subject to a lockdown," said John Sutherland, executive vice-president of the Nova Scotia Automobile Dealers' Association.

With car dealerships doing their best business in April, May and June — but with most Nova Scotians abiding by the directives of public health to stay home and only leave the house for essential business — that translated into poor sales for automobiles.

Even as restrictions eased up in June, Nova Scotia saw the biggest drop in the country for new car sales. In fact, even though the province was the only one to show a zero per cent change in sticker price for new cars, sales in June 2020 dipped 35.8 per cent compared to the same month last year. That's the highest percentage decrease in the country.

Stay-at-home orders 

Sutherland believes it was all about the stay-at-home orders.

"I think as I watched Nova Scotia, and Nova Scotians, during the state of emergency, I think they paid particular attention to the advice from the medical officer of health," he said. "And when our premier says, 'Stay the blazes home,' there was a definite message there and I think Nova Scotians collectively responded to that."

Sutherland said car dealerships had reduced staff and followed physical distancing requirements, but were open for business.

While sales cratered, Sutherland said the industry remains strong with no dealership closures.

"I'm not aware of any significant job losses from dealerships," he said. "Quite the opposite."

Thomas Storring, the director of economics and statistics for the province's Finance and Treasury Board, said that passenger car sales have been declining for years as a share of motor vehicle sales, offset by rising sales of trucks and SUVs.

During COVID-19, there has been a larger decline in passenger car sales than in truck and SUV sales. Trucks and SUVs now make up more than three quarters of vehicles sold in Nova Scotia. 

Concerns over possible exposure

Automotive expert Doug Bethune says even though new car dealerships do thorough cleanings, there's still the perception among the public that getting into a new car could be a risky move.

"A lot of the new cars come in by rail or by truck," Bethune said. "And they're unloaded down there at the Autoport in Eastern Passage. And they have individuals drive those cars on and off. So, you know, it's not like they're sterile when they arrive."

Bethune said the coronavirus also slowed down the trade-in side of the industry.

"There is a concern that if an appraiser at a dealership is going to take your car for a drive and run it and go through it, then I'm sure they have concerns too about whether that car has been exposed to the coronavirus, so that seems to be affecting the market both new and used," he said.

But if people were willing to buy RVs, ATVs boats and even new homes, why did enthusiasm for new cars wane?

Dan Park, CEO of clutch.ca, an online used car retailer, said he hasn't noticed a dip in sales. But he said it makes sense that people held off on buying new vehicles.

"I think people found themselves having a lot more time, particularly to go to a cottage or enjoy some of the more outdoor sports, and so RV sales and our ATV sales certainly increased," Park said.

"And a lot of folks use a car to get to their job, and if you're working from home, obviously the need for that car is much less than it would've been otherwise."

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