Globe and Mail: British Columbia’s luxury car boom is in full swing
March 27, 2015
VANCOUVER — The Globe and Mail
British Columbians love expensive vehicles.
The 2014 sale of pure luxury vehicles came in 41.2 per cent above the overall Canadian market-share average, according to research by DesRosiers Automotive Consultants. In comparison, pure luxury sales in Ontario, the No. 2 market , came in 20.2 per cent above the national average.
Several factors account for the trend:
The international flavour of high-income people flocking to British Columbia and the Lower Mainland.
A “business-friendly” provincial government that has residents feeling flush, willing to spend money on strong automotive brands.
British Columbians are leveraging equity on their homes to help finance new cars. Residents are accustomed to dealing with a high cost of living, so why not throw a premium car into the game?
“A lot can also be said about the make-up of Canadians across Canada by comparing which vehicles are most popular in each province,” says Dennis DesRosiers, president of DesRosiers Automotive Consultants. “Luxury is centred largely in Ontario and British Columbia, although Alberta is only slightly below [their] average. Upper mid-sized family vehicles dominate in Ontario and the Prairies.”
Most luxury vehicles are sold in Ontario, with its much larger population, but a thorough look at the share of market segments, province-by-province, brings to light a richer story.
What’s shocking about British Columbia is just how deep and wide the luxury love affair runs. Pick a premium segment, and as DesRosiers’ data show, British Columbia residents take more than their fair market share:
Luxury cars, 21.1 per cent above the national average.
Super-expensive luxury cars, 69.7 per cent above.
Luxury sports cars, 59.4 per cent above.
Luxury sport-utility vehicles (compact, intermediate or large SUVs), 50 per cent or more above the national average.
Alberta’s share of expensive full-size pickup truck sales exceeded the national average by 100 per cent, but British Columbians liked their big rigs, too, with market share 4.9 per cent above the national average.
Dimitri Kotsalis, general manager of the BMW Store Vancouver, Rolls-Royce Vancouver and Mini Yaletown, says British Columbians in a nutshell have a “taste for premium and a willingness to stretch” to accommodate it.
And then there’s the weather in the Lower Mainland .
“We find customers willing to stretch because the weather is so much easier on cars,” he adds.
Blair Qualey, president and general manager of the New Car Dealers of B.C., echoes Kotsalis on the weather, then joins Kotsalis in pointing to the cosmopolitan makeup of British Columbia, especially the Greater Vancouver area stretching all the way east to the Fraser Valley where you’ll find the Langley Auto Collection with its Audis, BMWs, Land Rovers, Jaguars, Infinitis, Minis and Porsches.
“Part of what’s going on here is demographics – and the diverse mixture of cultures of the people who come here from a lot of different markets,” he says. “Some, for example, come from Asia and when they get here, they find premium vehicles a real deal compared to at home where taxes are so high.”
Here’s a perfect example of what’s happening. British Columbians purchased just slightly more than 10 per cent of all the new light vehicles sold in Canada last year, yet B.C. accounted for 16 per cent of Canada’s best-selling luxury car, the BMW 3-Series. Seventeen per cent of all the Mercedes-Benz B-Class wagons sold last year landed in a British Columbia garage. Two of every 10 Mercedes E-Class cars were sold in British Columbia, and 16 per cent of all the Porsche 911s sold in 2014 found a home in British Columbia.
British Columbians love their premium SUVs even more. One of every four BMW X5 SUVs sold in Canada left a B.C. dealership.
“And it’s a product we can’t get enough of – any BMW with an X on it, in fact,” Kotsalis says.
One in five Mercedes M-Class SUVs was sold in B.C. last year. And 22 per cent of all hulking and hugely expensive Mercedes G-Class wagons were sold in British Columbia. Pick a luxury ride and you’ll find it did best in British Columbia on a per capita basis.
Manufacturers and their dealers have certainly noticed the trend. Last year, Mercedes-Benz Canada opened two massive dealerships in the city and the large Open Road Group has begun construction of a new Audi store near one of those Mercedes outlets on the border of Vancouver and Burnaby.
The even larger Dilawri Group just opened a new Audi store near downtown on Burrard Street, not far from The BMW Store. Nearby, wealthy car shoppers will also find a renovated Jaguar Land Rover and Bentley store, and it’s not far from a future all-new Aston Martin retail outlet, a Bentley retailer and Ferrari Maserati of B.C.
A 10-minute drive from that cluster of dealers, Terminal Avenue is becoming Vancouver’s newest and richest dealership row. Not only did a new Mercedes store open its doors last year, but also a new Porsche Centre and a new Acura retail outlet came alive. They’re just down the way from a big General Motors dealership, too.
Qualey says B.C.’s 400 dealers collectively are investing hundreds of millions each year in their facilities and services. Statistics Canada projects the population of the Lower Mainland to grow from its current 4.6 million to 5.6 million by 2030. Qualey says his dealer members expect new British Columbia residents will follow similar buying patterns of the past. This means the premium market is likely to remain strong over the next decade and a half, at least.
“Dealers are investing,” he says. “They want to sell what their customers want to buy and give them the experience they expect with that purchase,” he says.
Dealer Members with New Car Dealers Association
We represent more than 390 New Car Dealers throughout British Columbia.