Crowe MacKay LLP is the only Canadian member of AutoTeam America. Below are points from the recent meeting of the member firms. For more information contact Conven Tang in our Edmonton office.

Industry

• New vehicle sales projected to be 16M units, $800B in sales at $50K average transaction in 2026.
• Gross margin average on new vehicle sales steady at $3,250.
• Gross margin average on F&I fairly stable at $2,303.
• Average net income projected to be $1.82M this year.  Slight decrease from $2.17M in 2025.
• Lease returns projected to be at 3.2M units by the end of the year.
• Average new vehicle inventory at 77 days.
• Sales mix of 83% light weight trucks (including SUVs) and 17% sedans/cars.
• Consolidation continued in 2026 with 31% of high-volume roof tops representing 64% of overall sales.
• 30% increase in out of state vehicle purchases by consumers.
• Carvana market cap increasing with entrance into new vehicle market via Stellantis. 
• Used vehicle sales projected at 39M units, $1.2T in sales at $29K average. 
• Carmax and Carvana together are approaching 50% of the used vehicle market.
• Cap rate steady between 7.5 – 8.0%

Mergers and Acquisitions

• Eastern and Southern US are still hotspots for transactions at the moment.
• 2026 year to date saw 462 transactions with 101 involving larger dealership groups.
• Public companies spent $2.6B in 2026 on acquisitions and have $6.9B in liquid capital for further purchasing activity.
• In market acquisitions strongly favoured over out of market acquisitions with public companies purchasing 91% in market and private purchasing 56% in market.
• Import focused acquisitions strongly favoured over domestic brand acquisitions with public companies purchasing 86% import and private purchasing 54% import.
• Bluesky trending up due to demand for purchasing and lower supply of rooftops for sale. 
• Syndications becoming increasingly popular for mergers and acquisitions activity.

Legal

• FTC laws regarding pricing still unclear as to what should be included as the advertised price.
• State laws will impact the pricing regarding rebates and add ons.
• Need to inform customers that they are being recorded not only on the phone, but also on premises via security cameras.
• Using AI for advertising slogans may breach copyright and trademark laws if due diligence is not done.
• Replacing HR, legal and IT with AI brings into question who is responsible when something goes wrong.

Effect of Chinese Vehicles

• Chinese manufacturers will not have an advantage if vehicles manufactured in North America.  The fear is the importing of vehicles in from China.
• 18.3% export growth rate for China compared to 9.3% in the US.
• January to August of 2026, China exported 6M units worldwide.
• China has the ability to produce 55M units utilizing 70% of capacity.  Global demand is at 100M units.
• Domestic manufacturers have utilized 80% of capacity in the past 36 quarters.
• China pushes for manufacturing EVs due to availability of raw materials in China to produce these vehicles.
• China holds 11.2% of the EV market in Europe without having to increase production.
• Market share of all non-Chinese manufacturers have decreased in China.
• Full size truck market still going strong as there is no Chinese equivalent being produced. 
  
  

The 2040 Vision Study is now available on the AutoTeam America website. 

Most of the world’s rare earth materials come from China; GM’s betting on the U.S. as another major source.

Sourcing Materials

Modern cars use multiple raw materials that aren’t abundant everywhere; as we all know, certain regions and countries have specific raw material endowments. Most rare earth materials essential to car production are found in China, which supplies most of the world. With supply not necessarily stable and with the rest of the world, it makes sense for some automakers
to invest in new sources, and it would be more beneficial to have them closer to home.

GM’s Long-term Investment

Automotive News published a report that highlights General Motors (GM), which made a long-term investment in a local supplier of rare earth materials. Most rare earth materials are used to produce electric vehicles (EVs), and as demand for more efficient vehicles rises, GM’s gamble is starting to pay off.

GM’s U.S. supplier is MP Materials, and the partnership began during the turbulent supply chain issues brought about by the COVID-19 pandemic. At the time, the world was running out of semiconductor supply, which led to shortages of technological products as well as cars. GM then decided to reevaluate its own supply chain and took a risk with MP Materials.
Shifting from a global supply chain, GM went for a more regional approach that follows the mindset of “buy where you build.” As a result, GM’s 5-year-old gamble is starting to bear fruit, with the automaker now set to begin receiving its first supplies of rare earth materials from MP Materials.

The Rare Earth Effect

Rare earth materials are a group of 17 metallic elements found mostly in the Earth’s crust. Despite their relative abundance, the problem is the cost of mining these vital materials. The list of products and technologies that use these elements is extensive, with notable examples including hybrid car batteries, fiber optic cables, audio technology, and data storage. 

Source: Autoblog & Automotive News

General Motors and Ford Motor have lost more market share in the United States than any other automakers ‌so far this year as buyers prioritize fuel efficiency amid high gas prices, an industry forecast shows. Ford’s vehicle sales are expected to drop 8.8% through the first three quarters of the year, according to a forecast released Thursday from Cox Automotive. That would knock Ford’s market share down nearly a full percentage point, to 12.5%.

Source: Reuters

Production of Ford Motor Co.’s most important vehicle, its F-150 pickup, is down for nearly a week at a Detroit-area plant, according to a memo viewed by Reuters. All production crews at Dearborn Truck Plant were canceled Sept. 24-29, the memo showed. Ford’s Kansas City Assembly Plant canceled some shifts this week because of the same issue affecting Dearborn, a person familiar with the matter said. Kentucky Truck Plant near Louisville increased production of other trucks to make up for losses elsewhere, the person said.

Source: Reuters via Automotive News

Volkswagen’s battery production subsidiary, PowerCo Canada, says its EV battery gigafactory in St. Thomas, Ont., will not begin operations until 2029, two years later than the 2027 start date it had targeted since the project was announced in 2023. PowerCo confirmed the delay Thursday while announcing the appointment of Canadian construction firm EllisDon Corp. as general contractor for the southwestern Ontario site. Joel Karlsberg, PowerCo Canada’s chief procurement officer, said the company is “aligning the project’s timeline and product strategy with evolving market demand, technological advancements, and the Volkswagen Group’s long-term strategy.”

‘Getting the Pacing Right’

PowerCo says the later start date will allow the plant to accommodate next-generation battery technology and give the company room to scale production as demand shifts. Despite the delay, Karlsberg said the company is not scaling back its ambitions for the site. He said the St. Thomas plant remains a “cornerstone” of PowerCo’s North American strategy, adding that the slower timeline is about “getting the pacing right — not stepping back— to protect our long-term investment, support regional jobs, and position Canada, Ontario, and St. Thomas to benefit in a dynamic and evolving market.” 

Construction at the site has continued since the 2025 groundbreaking, with work now moving into what PowerCo calls its core infrastructure and structural phases. That includes building the shell of the production facility, along with mechanical, electrical and plumbing systems, and energy and utility infrastructure.

Government Investment

The initial investment in the 370-acre facility included $7 billion from Volkswagen, with the Ontario government offering $500 million in incentives. The federal government added $13.2 billion in investments, subsidies and tax credits tied to output.

The gigafactory is expected to produce up to 90 gigawatt-hours, or up to 1 million EV batteries, annually. It is also expected to employ around 3,000 skilled workers when fully operational and support thousands of indirect jobs in the region.

About 60 EllisDon workers are currently on-site. PowerCo expects the EllisDon workforce to grow to roughly 1,300 at peak construction, alongside other personnel supporting the project.
The gigafactory, first announced in 2023, is a joint undertaking among Volkswagen Group, PowerCo and Canada’s federal, provincial and municipal governments. It is expected to be PowerCo’s largest cell manufacturing plant worldwide, supplying battery cells for future Volkswagen Group electric vehicles sold in North America. 

PowerCo SE was founded in 2022 as a subsidiary of Volkswagen Group. PowerCo Canada, headquartered in St. Thomas, oversees the company’s Canadian operations.

Source: Electric Autonomy Canada 

Something’s missing from the nation’s auto showrooms: new cars. “It’s real bad,” said Michael DiFeo, a New Jersey Cadillac dealer. “I literally have people saying, ‘I am not leasing this car again. It’s the same car and the price keeps going up.’” Fresh models attract car buyers to showrooms and command higher prices. Without them, dealers are left pushing aging designs while automakers race to churn out new models—meanwhile using retro throwbacks, special editions and six-figure status symbols to keep buyers coming. 

Source: Wall Street Journal

According to Mobility Global's latest forecast, U.S. light-vehicle sales are expected to reach 16.1 million units in 2026 and only 16.4 million by the end of the decade, remaining well below the roughly 17 million annual sales levels that defined the market before the pandemic. Analysts speaking last week at a Mobility Global media briefing said affordability remains the single biggest challenge facing consumers, contributing to a fundamentally different market environment.

Source: Mobility Global/PR Newswire 

On Sept. 30, 2025, the federal Clean Vehicle credit expired as part of the One Big Beautiful Bill, taking away the $7,500 incentive for new EV purchases and leases and up to $4,000 on qualifying used EVs. A year later, dealers and consumers are adjusting to the new market without the added incentives. Ahead of the tax credit's expiration, EV sales picked up in the third quarter of 2025, with Cox Automotive data putting sales at 437,000 and a 10% share.

Source: Car Dealership Guy

But.....

More EV Buyers Return to Gas-Powered Vehicles As Powertrain Preferences Shift

A new report reveals that while EV buyers in the U.S. have largely remained loyal to the electrified powertrain, a growing number are returning to gas-powered vehicles for their next purchase. The details: Through June 2026, 52,154 EV households in the U.S. returned to the market and acquired a gasoline vehicle, excluding hybrids and plug-in hybrids—a 15.9% year-over-year increase, according to Mobility Global.

Source: Car Dealership Guy

According to Reuters, Dontay Wilson, President of the United Auto Workers (UAW) local at General Motors’ Fairfax plant in Kansas City, Kansas, said the plant is on pace to build about 35,000 revived Chevrolet Bolts before production ends in the first quarter of 2027. Whereas, the plant had previously been on track to build about 150,000 units. Wilson based the estimate on current daily production, though GM has not confirmed the figure. A GM spokesperson told Reuters that the automaker continually assesses market dynamics and customer demand when making operational decisions.

Source: CBT News