Canada saw 187,000 light‑vehicle sales in May 2025, up about 7.9 % year‑over‑year—but this benefited from one extra selling day and a weak May 2024 for comparison MarkLines.
June sales softened, with about 178,000 units sold, up 5.3 % from June 2024—but after adjusting for fewer selling days and a tariff‑driven pull‑ahead in spring, momentum is fading CBT News.
Economists forecast total 2025 Canadian light‑vehicle sales around 1.8 million, with a slight dip projected for 2026 MarkLines.
What to expect at the dealership:
Traffic may taper post‑spring rush.
Watch for consumers delaying purchases as tariff impacts bite.
Incentive strategies might be needed to compete.
U.S. 25 % tariffs on auto and parts took effect in early April; Canada mirrored with counter‑tariffs. USMCA‑compliant vehicles face a partial exemption CarEdgetricorauto.com+5Reuters+5Car Dealership Guy News+5.
GM posted a $1.1 b loss attributed to tariffs, forcing them to shift production toward U.S. plants and absorb costs instead of raising prices The Wall Street Journal.
Volkswagen reports that North America vehicle volumes are down ~16 % globally, though global sales remain strong Collision Repair Mag.
There remains hope for carve‑outs in trade talks—dealerships should stay alert for policy changes CTVNews.
What to expect at the dealership:
MSRP stability for now—but margin pressure.
Watch inventory mix and source breakdown (domestic vs. non‑compliant).
Potential supply bottlenecks for models built outside North America.
Canadian demand is shifting sharply: subcompact cars jumped 50.5 % and small pickups rose 38.7 % year‑over‑year in H1 2025 fleetinsights.emkay.com.
Luxury and mid‑size passenger cars declined sharply (luxury ‑46.9 %, intermediate ‑33.6 %) Wikipedia+1Market Report Analytics+1.
What to expect at the dealership:
Realign inventory toward high‑growth segments.
Highlight models like Mitsubishi Mirage, Nissan Versa, Fiat 500E.
Consider promoting affordability and incentives tied to small vehicles.
The average used vehicle price climbed to C$33,868 in June, up 1.6 % MoM and 6.3 % YoY—marking seven consecutive months of gains Canadian Auto Dealer+6Canadian Auto Dealer+6CarEdge+6Clutch+2Clutch+2Canadian Auto Dealer+2.
Wholesale used prices fell slightly in July (‑0.32 % week ending July 19) but remain historically elevated tricorauto.com.
Used cars are turning over faster, averaging ~52 days on lot, inventory up ~4.7 % YoY—Q2 2025 retail averages rose to ~$28,939 Car Dealership Guy News.
What to expect at the dealership:
Opportunity to capture price-maintaining trades; leverage strong used values.
Fast turnover means leaner used inventory—plan restocking accordingly.
Watch entry-level used market (< C$25k), in high demand but thin supply.
Canada’s EV mandate now requires 20 % zero‑emission vehicle (ZEV) share by 2026, rising to 60 % by 2030 WikipediaPolitico.
EVs represented just 8.7 % of new vehicle sales in May, projected to approach 10 % in 2025—but automakers worry the target won’t be met PoliticoAuto Service World.
Tesla’s share cratered in Québec, with 85 % drop in new registrations in Q1 2025 amid rebate suspensions and public backlash Business InsiderPolitico.
What to expect at the dealership:
EV inventory and promotion strategies must adapt regionally.
Collaborate on rebate claims—some provinces paused or revised programs.
Prepare for increasing regulatory complexity and compliance costs.
27 % of Canadians plan to buy a vehicle within six months, with 18 % targeting new based on recent intention data tricorauto.comAuto Service World.
Online touchpoints are now core: 60 % consider buying entirely online, and ~85‑88 % want a mix of digital and in-person transactional steps Auto Service World.
What to expect at the dealership:
Enhancing online lead capture, virtual tours, pre-approval and digital trade tools is critical.
Think hybrid sales models: build‑to‑order, online quotations, home test drives Transport Canada.
| Area | Key Focus |
|---|---|
| Inventory | Shift toward sub‑compacts, trucks; monitor tariff‑affected models |
| Pricing | Maintain tight margin control; evaluate used pricing trends weekly |
| EV Strategy | Stay current on provincial rebate changes and mandate compliance |
| Digital Sales | Invest in online tools and multi-channel consumer journeys |
| Training | Train staff on tariff impact discussions, EV filing, used‑car appraisal |
Canadian automotive retail is navigating a volatile blend of trade uncertainty, evolving consumer behavior, and regulatory shifts. While new‑vehicle growth may cool off, strong used inventory pricing and demand for value-focused segments offer opportunity. Dealerships that adapt quickly—through inventory flexibility, digital sophistication, and astute pricing intelligence—will be best positioned for success in the months ahead.