Car sales in Canada are plunging as consumers struggle with U.S. tariffs and the war in Iran.
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Motor vehicle sales fell in all 10 Canadian provinces during March, with some markets recording year-over-year declines of 20%. Analysts say that car sales are falling due to higher prices caused by U.S. tariffs, as well as high gas prices at the pumps due to the war in Iran.
The situation is bad news for Detroit automakers General Motors (GM), Ford (F), and Stellantis (STLA) who count on the Canadian market to contribute to their North American sales. “March was a challenging month for the Canadian new light vehicle sales market,” said DesRosiers Automotive Consultants in a new report, adding that sales contracted by double digits in seven of 10 Canadian provinces.
Cost of Living Increases
DesRosiers added in its report that, “The breadth of the weakness this March and the disappointing (seasonally adjusted annual rate) of 1.85 million are undoubtedly concerning, with both trade pressures and high gas prices weighing on the market.”
The United States-Israel war on Iran has led to oil prices jumping higher around the world. The average price of gas at the pump in Canada is $1.70 per liter, including taxes, up from $1.28 at the start of 2026. The Bank of Canada recently said that the Middle East conflict has derailed improving expectations for the Canadian economy and inflation.
Comparing Auto Stocks
Below is a chart comparing the stocks of GM, Ford and Stellantis. As one can see, only GM stock has a Strong Buy recommendation. General Motors’ stock also has the most potential upside at 25%, making it the most attractive of the three securities.
