New Vehicle Sales in Canada Rose 12 Percent in 2023 Despite Record Prices

New vehicle sales increased 11.8 percent in Canada last year according to DesRosiers Automotive Consultants (DAC), marking the biggest yearly improvement since 1997.

Not only that, but the average price of a new vehicle in 2023 topped $50,000 for the first time ever and reached approximately $52,900.

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This can be explained partly by “the lingering chip shortage, the increasing number of electric vehicles, the continued shift from passenger cars to SUVs and trucks, as well as widespread inflation,” DAC managing partner Andrew King said. 

In 2023, SUVs and pickups accounted for 85.8 percent of total new vehicle sales in the country, another all-time high. “That’s what shoppers are looking for and has been the case for a number of years,” King noted. 

At this rate, one could assume that conventional cars will represent just one out of ten new vehicles sold in Canada within two or three years.

As Canadian Black Book points out, compact cars are now 50 percent more expensive than they were in 2020, whereas SUV prices have jumped 25 percent during that span. Overall, the average new car cost nearly $60,000 as of September 30, 2023, up from just under $40,000 in 2020.

Automakers have eliminated most subcompact models and many compact models in recent years, pushing the average sticker further up, King added. They obviously make more profit selling SUVs and trucks than cars.

“In the past five years, the industry has won people over with smaller SUVs like the Nissan Qashqai and Hyundai Kona,” HGrégoire president John Hairabedian said. “Customers want more space than what passenger cars typically offer.”