DesRosiers: Canadian Market Not Quite Back to Full Strength

Though Canadian new-vehicle sales were up almost 7 percent in April, there still is “a long way to go” before it can be determined the market has made a full recovery, according to the latest sales analysis from Dennis DesRosiers.
Sales came in at 159,942 for the month, which marks a 6.9-percent rise from April 2010. Through the first four months of the year, Canadian new-vehicle sales have reached 493,942, a 3.6-percent hike.
The April sales total was “solid,” DesRosiers said, but he stressed that, “It was still well below April sales in 2007 and 2008.”
He added: “The market has a long way to go before we can safely say that the vehicle markets have returned to more normal levels. With supply constraints coming as a result of the Japanese tsunami we expect the next quarter to be quite soft.
“Indeed we are pulling 45,000 units out of our second- and third-quarter forecast and pushing them into our fourth- and first-quarter 2012 forecast,” DesRosiers continued.
What DesRosiers called the “real story” of the month was Ford maintaining its robust sales. The automaker once again captured the No. 1 spot in the market, improving 9 percent and moving 25,536 vehicles during April.
Not only that, Ford’s year-to-date sales stand as the best in Canada, as well. The automaker sold 81,427 units in the year’s first four months, an 8.7-percent improvement from last year.
Interestingly enough, Chrysler supplanted General Motors as the second-place OEM in Canada during April. Chrysler moved 22,851 units (up 11.1 percent), compared to GM’s 22,622 sales (down 3.5 percent).
GM still maintains the No. 2 spot for year-to-date sales, which hit 73,970 units (up 3.5 percent), while Chrysler is third with 71,906 vehicles sold (up 9.3 percent).
“GM had a very difficult month with sales actually down by 3.5 percent in April from their 2010 totals. Year-to-date, they are at exactly the identical market share in 2011 as they had in 2010 with a 15 (percent) share of the market,” DesRosiers pointed out.
“Ford and Chrysler have each picked up about a percentage point of market share in Canada. With the problems at GM, the Detroit 3 as a group actually lost a bit of market share to import nameplates in April,” he continued. “They are still up marginally year-to-date but it shows just how competitive the vehicle markets are in Canada and how hard it is for any vehicle company to achieve long term growth in sales.”
Among the brands showing the heftiest increases in their April sales, Kia jumped 34 percent and Volkswagen climbed 25.8 percent. In fact, Kia had its best month on record and notched its 28th straight month of year-over-year gains. VW posted record sales for the seventh straight month.
DesRosiers also cited a few Japanese automakers as “struggling.” More specifically, Honda’s April sales were down 6.3 percent, Mazda was off 9.2 percent and Suzuki fell 15.1 percent.
Breaking it down by segment, DesRosiers pointed to the return to strength for passenger cars, whose April sales climbed 8 percent. Comparatively, trucks climbed 5.9 percent, which DesRosiers said was “still strong but nowhere near where they have been the last six to eight months.”
He further noted: “This was inevitable as light trucks had huge incentive money on them and ultimately some of this incentive money had to come back down to earth. I’ll be able to tell you better with my top 10 report in a few weeks, but higher gas prices also pushed the consumer back into passenger cars and away from light trucks.
“Import nameplates are much stronger on the car side of the industry than the truck side of the industry and the rise in passenger car sales is also one of the reasons why import nameplates collectively outpaced Detroit nameplates in April,” DesRosiers concluded.