Second of all, interest rates are very low and now is an ideal time to buy vehicles in Canada, with low and zero percent financing, it is easier for Canadians to finance cars and make lower monthly payments. Another reason that there was an increase in sales is that the prices of vehicles is getting lower (taking into account inflation) due to the fact that there is fierce competition in the industry. With many new companies coming into play, competition is increasing and firms are becoming price takers as oppose to the price setters they once were during the production auto sales eras. .
Social Forces .
Opportunity .
As the years pass, the age of Canadians is increasing steadily. By 2011 the median age of Canadians will be over 40, while more than 34% of the population will be over 50, clearly indicating the graying of Canada. We found that as people reach the mature household age group, an overwhelming 86% will either be looking to purchase a mid sized sedan or a sports utility vehicle, Refer to Appendix C. The reason for this is that as these people age, they are more inclined to purchase a vehicle that offers greater comfort and ease of entry, as opposed to making a purchase based on price or economic efficiency. An automotive manufacturer that responds and adapts quickly to this trend, will reap great benefits. For example, Honda is now marketing its first SUV, which will be available for purchase in 2003. .
Threat .
As time passes, the percentage of people in the mature household segment is rapidly increasing and this could pose a threat to auto manufacturers. Although this group generally controls much of our countries accumulated wealth, they are highly unlikely to own as many vehicles per household as their younger counterparts. At the age of 50 and above, 60% of people surveyed expect to own just one vehicle. This drastically contrasts the age group of 25-40 years, with 84% of these people owning two or more vehicles (Refer to Appendix C).
