DesRosiers: Canadian New-Vehicle Sales Deterioration Softens

By Joe Overby, Staff Writer
November 06, 2009

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RICHMOND HILL, Ontario — Although Canada's new-vehicle sales were down 1 percent in October, it was the market's best year-over-year performance of 2009, according DesRosiers Automotive Consultants, which viewed the monthly results with a sense of "guarded optimism."

Overall, light-vehicle sales totaled 121,500 units, down from 122,711 in October 2008.

"Yes the market was still down 1 percent, but this is the best performance in the past 12 months, with sales down double digits most of this year going back to November of last year," explained Dennis DesRosiers, president of the company.

He added that, regarding the company's SAAR tracking, "You will see that if seasonality is factored into these statistics, the market in Canada showed some fundamental strength in October. Everything is heading in the right direction. Three cheers."

In fact, the year-over-year decline has gradually become less steep since hitting 27.7 percent in February, as it has slowed down seven of the eight months since then.

More specifically, new-car sales dipped 7.9 percent in August, followed by a 3.5-percent softening in September and the 1-percent drop last month.

Breaking the data down further, though, DesRosiers noted that there are "a lot of issues to discuss, both positive and negative."

Looking at segments, passenger car sales were down 2.6 percent year-over-year, while light trucks were up 0.7 percent.

"The car market continues to underperform the light-truck market and one wonders how sustainable this is in the longer term given government's focus on green issues," DesRosiers shared. "I understand why (the passenger car segment) is in trouble but that doesn't alleviate the issue.

"The consumer hurt most in a downturn is the low-end entry-level consumer, and they have obviously vacated the market to a degree," he continued. "Thus, passenger car sales remain soft, down 2.6 percent for the month and 19.1 percent on the year, with light truck up 0.7 percent for the month and down only 5.7 percent on the year."

Analyzing the data in more depth, DesRosiers noted that Big 3 new-vehicle sales were down 13 percent year-over-year, while import sales climbed 10.1 percent.

Of the top-selling OEMs, General Motors led the way with 18,818 units sold, followed closely by Toyota (18,813 vehicle sales) and Ford (18,187 units sold).

"I cannot recall ever seeing a sales race for the top position this close in any particular month in my entire 40-year career of studying this industry," DesRosiers commented.

That said, there also exists a few "huge performance gaps" between some of the larger full-line automakers. For instance, GM's new-vehicle sales fell 33.1 percent, but Ford showed a 20.3-percent improvement.

"It is coming up on six months now since the bankruptcy at GM in the U.S. and some of the market issues related to this should have been disappearing," he noted. "They haven't, and that must be a huge concern for GM. Indeed October underperformed the market year-to-date for GM when you would think that the opposite should be happening."

Among individual brands, some of the "big winners" from October included Acura, whose sales climbed 76.9 percent, and Hyundai, which showed a 43-percent spike in sales.

Also showing gains of more than 20 percent were Subaru (up 39.3 percent), Mercedes-Benz (up 27.8 percent), Jaguar (up 23.6 percent) and Kia (up 23.2 percent).

AR Canada