Research report on sales practices among Quebec automobile dealerships

As part of the Assess your true needs vehicle size awareness campaign, Équiterre commissioned CIRANO to survey sales practices in the automobile sector and their impacts on purchasing a vehicle.

The study was conducted in 2022 in the form of a mystery-shopper survey among 30 rural, suburban and urban automobile dealerships in Quebec.

Read if you wish to:

• Understand sales practices in the auto sector

• Understand the impacts of these practices on purchasing a vehicle

Report’s conclusions:

• Dealership sale staff do not systematically “steer” potential customers toward large vehicles (light-duty trucks, SUVs);

• They present a larger number of positive arguments in favour of large vehicles and seem less familiar with arguments against such vehicles;

• A number of urban, rural and suburban dealerships prominently display larger vehicles in their showrooms;

• There is almost no talk of the environmental impact of the various vehicle types or of the safety implications for other road users.

• Dealerships often display images of large vehicles in nature and even off-road (which is prohibited), making them even more attractive to purchasers who would not (or could not) use them in that way. It has been documented that imagery at point of sale (advertising, posters) influences consumers.

• The potential influence of these images is strengthened by partnerships or collaborations with organizations like the National Hockey League (Hyundai) or Parks Canada (Subaru), which lend a degree of legitimacy and positive associations to the vehicles promoted by the manufacturers.

Recommendations in connection with the report for governments:

• Recognize the rise in light-duty trucks as a public health problem.

• Phase in rules governing advertising practices to prohibit greenwashing and require disclosure to consumers of information on vehicles’ environmental impact.

• Regulate marketing initiatives and promotional partnerships between automakers and public organizations.

  • e.g. Access to a provincial or federal park upon purchasing a particular brand-name vehicle.

At the provincial level

1. Provincial government:

• Define, by way of regulation, which major facts must be disclosed under section 219 of the Consumer Protection Act by manufacturers and dealerships, in the documentation they provide to consumers (e.g. brochures, website, etc.) and in the advertising they produce (e.g. video or radio advertisements). The information disclosed should include the following:

• Information on the risks posed by the various vehicle types for the safety of passengers and other road users

e.g. 1 Collision test results

e.g. 2 Statistics like “Collisions provoked by SUVs are 28% more fatal for other drivers.”

• Information on the impacts of the various vehicle types on the environment

e.g. Quantity of GHG emissions per 100 km or life cycle.

• Mention of the ban on the sale of combustion vehicles by 2035.

• Comparative information on costs

e.g. Comparison of costs at time of purchase and annual vehicle costs in relation to an average sedan.

• Mention of alternatives to automobile use.

e.g. “Instead of driving, would you consider biking, walking or taking public transit for some of your travel needs?”

2. Office de la protection du consommateur (OPC):

• Publish guidelines on automobile advertising, as have done France, the United Kingdom and Australia, concerning the “environmental” nature of the products.

• As a supervisory mechanism, agree to a voluntary undertaking, under sections 314 and 315.1 of the Consumer Protection Act, with an organization representing the automobile industry, regarding information that automobile advertising should disclose. If these standards are not observed, consumers could turn to this organization or, if they do not obtain a satisfactory resolution, to the OPC.

3. Corporation des concessionnaires automobiles du Québec (CCAQ):

• Provide sales teams with better training so they can discuss the safety implications and environmental impact of the various vehicles.

At the federal level

1. Federal government:

• Create a Canadian automobile advertising code that would include the requirement to post information on the safety risks for passengers and other road users, on environmental impacts (GHG emissions) and on their prices.

OR

• Create regulations under the Competition Act indicating that advertising presenting a product outside its normal use context, or disclosing selective information (e.g. one aspect of the product is shown without showing the others), is deemed to be deceptive under the provisions governing deceptive advertising.

2. Competition Bureau Canada:

• Publish guidelines on automobile advertising, as have done France, the United Kingdom and Australia, concerning the “environmental” nature of the products.

• As a supervisory mechanism, agree to a voluntary undertaking with an organization representing the automobile industry, regarding information that automobile advertising should disclose. If these standards are not observed, consumers could turn to this organization or, if they do not obtain a satisfactory resolution, to the Competition Bureau.