RICHMOND HILL, Ontario -

The Canadian new-vehicle market softened almost 5 percent amid “a very mixed bag” in a month that saw Japanese brands continue to struggle with inventory issues while other automakers enjoyed skyrocketing sales, according to DesRosiers Automotive Consultants.

Overall, there were 141,472 new-car sales in Canada during July, a 4.9-percent drop from a year ago. Year-to-date sales through July came in at 949,244 units, a 1.5-percent gain.

As for individual automakers, Dennis DesRosiers indicated that “it is the usual suspects" leading the way,  as Audi (up 14.2 percent), BMW (up 14.1 percent), Hyundai (up 10.9 percent), Kia (up 12.9 percent) and Volkswagen (up 16.5 percent) all enjoyed year-over-year gains in the double digits.

But Japanese brands were a different story. For instance, the Toyota brand was down 17.9 percent, with Lexus off 22.1 percent. Honda sales fell 24.8 percent, and Acura sales dipped 18.7 percent.

“Honda and Toyota are still racked with supply problems, having under-performing months down in the double-digit range,” said DesRosiers, the consultancy’s president.

“We suspect that as the Japanese fill their supply lines, this will offset some of the negative economic indicators developing for the second half of the year,” he added.

As for the Big 3, Ford’s July sales came in at 27,329 units, essentially static (up 0.5 percent) from a year ago. Chrysler moved ahead 4.5 percent with 23,251 sales, and General Motors retreated 14.9 percent with July sales of 20,345 units.

Ford continues to keep the top spot in market share (17.7 percent), and DesRosiers called the OEM “still a strong No. 1 in the Canadian market.”

Particularly noteworthy is the dynamic between GM and Chrysler, as Chrysler outsold its rival in July, though it trails GM year-to-date.

“Not many would have predicted that GM could come in No. 3 in the market this year. Chrysler now has a 15.2 percent market share just slightly behind GM who captured 15.3 percent of the market year-to-date,” DesRosiers highlighted.

“GM’s sales were down by 14.9 percent for the month and are down by 1.3 percent year-to-date. This may be disappointing, but GM has said all along that they would be happy with a 15-to-16 (percent) market share number post their restructuring, and this is exactly where they are at,” he continued.

Moving along, the firm initially projected full-year sales for 2011 will climb 0.7 percent.  So, thus far, year-to-date sales are ahead of the forecast.

However, DesRosiers said it’s unclear what might happen in the second half.

“We’re going to hold our forecast for now since there is so much uncertainty out there and more downside threat than upside opportunity,” he explained.
“And remember that the market witnesses massive incentive money earlier in the year which came to a grand total of ‘nothing’ to help the market. If OEMs can’t find money to throw at the market, then we could see a very soft last half of the year,” he further noted. “A strong dollar usually provides an exchange rate bonus for the Canadian distributors, so we might we enough incentive money come forward to keep the market slight above 1.6 million.”