According to foreign media reports, the latest industry data shows that in the first half of this year, Canadian new car sales rose slightly by 4.3% to 958,214 units, driven by factors such as the rush to buy cars before the implementation of tariffs and the launch of cash incentives by automakers. Among them, sales in the second quarter increased by 6.4% year-on-year. But analysts warn that the Canadian auto market will face headwinds in the second half of 2025.
U.S. President Donald Trump has continued to increase tariff policies in the automotive industry, implementing multi-level tariff measures from basic raw materials such as steel and aluminum to specific auto parts and vehicles, and recently expanded the scope of tariffs to imports of copper materials. In response, Canadian Prime Minister Mark Carney introduced retaliatory tariffs.
Image credit: Ford Canada
None of these measures have curbed Canada’s growth in the first half of this yearCar sales。
According to data from J.D. Power Canada, the average transaction price of cars has risen as car sales in Canada have risen in the first half of the year.
Robert Karwel of J.D. Power Canada said, “It’s a win-win for the industry.” He analyzed that the transaction price of automobiles in each month of 2025 will show a month-on-month growth trend, and the impact of tariff policies on terminal pricing will be limited, and the current market price fluctuations are still mainly driven by inflationary pressures.
In the first half of 2025, the average transaction price of new cars in Canada was $48,900, compared to $48,300 in the same period in 2024. Since 2022, the average trading price has increased by 25%.
Karwel said that in order to make the vehicle sell smoothly, automakers are “spending quite a lot on incentives”, with the average incentive amount settling at $5,500 per vehicle.
This is because the Bank of Canada has been cutting interest rates and automakers can afford to invest more in incentives. At the same time, the relaunch of the zero-interest installment plan has directly lowered the threshold for car purchase.
Karwel also pointed out: “Consumer concerns about tariffs have indeed triggered a certain degree of early car purchases. As the effects of the current tariff policy gradually become apparent, the challenges facing the Canadian automotive industry will be concentrated in the second half of the year. ”
He said that automakers will spread the cost of tariffs across all brands and models, but companies are still willing to bear some of the costs.
Scotiabank’s economic research department also said that from the second half of 2025, the Canadian auto market will be challenging. The departmentforecastCanada’s annual car sales in 2025 may be 1.88 million units, and may further shrink to 1.81 million units in 2026.
The bank said in its Global Auto Report, “Canada’s auto sales rate is expected to continue to be sluggish in the second half of 2025 due to a weak labor market and uncertainty dragging down consumer spending growth.” ”
“Tariffs and uncertainty will continue to weigh on Canada’s economic outlook, however, there is significant uncertainty about this outlook, especially what impact tariffs and potential price pressures will have, and the impact on the automotive industry,” the report noted. ”