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Can Canada do it again? Will 2016 be another record year for new vehicle sales?

It appears Canada's auto industry has an open road when it comes to selling new vehicles, with some industry observers predicting the country has a shot at seeing a fourth consecutive record year in 2016.
Canada saw a record number of vehicles sold in 2015, the third year in a row that a new record was set. (John Bazemore/Associated Press)

It appears Canada's auto industry has an open road when it comes to selling new vehicles, with some industry observers predicting the country has a shot at seeing a fourth consecutive record year in 2016.

Auto industry analyst Dennis DesRosiers recently told CBC News that preliminary figures show Canada set a record for new vehicle sales in 2015.

According to DesRosiers, nearly 1.9 million new vehicles were purchased in Canada in 2015.

That's up slightly from the 1.89 million new vehicles that Statistics Canada reported were sold in 2014 and 1.77 million the year before that. The statistics agency will not release its own 2015 totals until later this year, but DesRosiers said its final figures will be higher than his preliminary total.

DesRosiers said cheap gas, low interest rates and a need for many Canadians to upgrade their aging vehicles were all factors in the sizzling sales of 2015.

'One heck of a healthy market'

He believes the market could see further growth in 2016.

"We're actually forecasting the market to be up just a point or two, but nonetheless potentially up," DesRosiers told CBC News.

Even if there is a "rough patch" this year, DesRosiers expects new vehicle sales still would top the 1.8-million mark.

"They might be down this coming year, it's possible, but it still would be one heck of a healthy market," he said.

Alex Koustas, a senior economist at BMO Capital Markets, said auto sales have been one of the few bright spots in the Canadian economy lately.

Koustas said car ownership has been on the rise in Canada for some time, which has factored into the hot sales environment.

"It's becoming a bit more of a choice for Canadians in terms of their total consumption relative to other goods," he told CBC News in a telephone interview.

'It's got a lot more draw'

He said the new models of vehicles being offered to consumers have better value than some of their predecessors from just a few years ago. And that is proving enticing to buyers.

"It's got a lot more draw and a lot more appeal relative to other items," said Koustas.

"So, that kind of helps explain why auto sales may be doing so well relative to some other retail categories. It's just been a product that the manufacturers have been very successful in marketing."

Tony Faria, the co-director of the Office of Automotive and Vehicle Research at the University of Windsor's Odette School of Business, said the strong sales in Canada are part of a continent-wide trend.

"Right now, we're at a period of six consecutive years of sales growth in the North American market and we haven't seen six consecutive years of sales growth since the 1920s," he said in a telephone interview. "So this is a very unusual, long period of sales growth and at some point and time, the market will slow down a little bit."

But Faria doesn't see any significant speed bumps for Canada's domestic auto sales in the near future.

"All expectations are that we'll probably see a new sales record in Canada in 2016," Faria said.