When it comes to the economy, people are always looking for signs that things are on the way up. But what exactly does a surge of luxury cars on Saskatoon streets mean for the local economy?
Jaguar is the latest luxury car dealer to roll into the Saskatoon auto market, developing a new dealership in Stonebridge with Land Rover and Volvo.
The British multinational car dealer is following Mercedes Benz, Maserati and Alfa Romeo with dealers in the area.
“The luxury market in Saskatoon would sell over a couple thousand vehicles every year in Saskatoon alone,” Michael Wyant, COO of Wyant Group, said. “So it’s very, very strong.”
The Wyant Group owns 11 dealerships in Saskatoon, seven of them selling the higher-end brands.
“We’ve seen luxury sales in Saskatoon and in the province grow,” Wyant said. “They’ve grown to the point where we can justify bringing in some higher-end brands and making investments in facilities.”
According to Scotiabank, Canadian auto-sales continue to jump.
Luxury auto sales accounted for 12 per cent of sales in 2017, which is up nine per cent since 2013.
So who in Saskatoon are buying these vehicles?
“In Saskatoon that could be old money, new money, professional,” David Williams, associate professor of marketing at the University of Saskatchewan, said. “A lot of these cars, the base models are around $90,000, that’s a lot of money for some but for others that’s less of a financial risk.”
Analysts are expecting another big year for luxury auto sales across Canada, but a hike to the interest rate could be a challenge for the sector.
“The middle class is able to afford those luxury type vehicles with the way the financing mechanisms work.” Sean Meshke, portfolio manager at PWM Private Wealth Counsel, said.
However, many are still pumping the brakes on spending.
“With unemployment falling to six per cent in Saskatchewan, those are all good things that are helping the economy,” Meshke said. “But I’m sure the average consumer or worker in the province is remaining cautious.”
Cautious, but perhaps optimistic as well.
Not only was Saskatoon one of the fastest growing cities in Canada last year, but according to SREDA, Saskatchewan is projected to be fourth among the provinces in economic growth this year.