Most of the doom and gloom is confined to the States

Bob Attrell

TADA PRESIDENT

There's been a lot of bad news surrounding the auto industry of late. I empathize with the many individuals who are feeling constrained and uncertain about their futures.

But consumers in Canada need to know that it's not all doom and gloom in the auto sector these days. Most of the bad news is confined to the U.S., where the collapse of the housing and banking industries has driven large segments of the economy to a virtual standstill.

On this side of the border, the auto sector doesn't look nearly as bleak. In fact, the retail car industry is cruising along at a fairly healthy clip.

It's strange how the good news stories about the car industry rarely get mentioned in the popular press.

Across Canada, year-to-date, new-car sales are up 1.4 per cent. Statistics Canada reported that passenger car sales rose 2.3 per cent, and sales of new trucks (minivans, sport utility vehicles, vans, etc.) rose 2.8 per cent in September.

If present sales trends continue, 2008 could be a record year for the retail automotive sector in Canada. Why isn't that story being told?

Have some dealerships reported sales declines in the past year? Yes, of course.

In any given market, good or bad, some dealerships outperform the competition while others fall short of expectations. That's a reality in any industry, not just ours.

Another positive statistic from the dealership side of the business is employment levels. Dealership employment continues to rise – our sector employs about 140,000 men and women, from coast to coast.

Ten to 15 years ago, auto experts predicted the dealer count would shrink to approximately 2,500, due to consolidation of manufacturers and industry-wide overcapacity. Well, the experts got it wrong.

The number of franchised auto dealerships has remained relatively stable over the past 10 years.

Today, there are 3,448 dealerships in Canada, compared to 3,608 in 1997 (a 4-per-cent drop). Since 2003, the overall dealership population actually increased by 3 per cent.

New dealers are investing millions to upgrade or re-build their facilities – hardly the strategy for a purported economic slump. Dealers are confident in the retail sector moving forward.

I don't mean to minimize the hardships and challenges that some auto manufacturers are facing. Industry shake-ups are never easy, and it's often the employees who suffer the most, employees with families and mortgages.

But our industry is strong and it will survive the current shake-ups occurring in the U.S. Our industry will be a primary engine of growth, employment and productivity in Canada for years to come.

One thing seems almost certain: the automotive industry will be much different in 10 or 15 years' time.

Cars will be engineered to be more energy-efficient, and advances in technology will make us more productive and fulfilled in our jobs.

For those who are skittish about the auto sector, and who are shopping for a new car, don't let the negativity dissuade you from finding the right car.

Our dealership network is strong. Our business models are sound. Our products are world-class.

Dealers who I speak to across the country are bullish about the future. Many of them are selling cars at a steady rate, and their showrooms and service centres are busy.

As Stephen Harper has said on many occasions, the fundamentals of the Canadian economy are sound. Negative thoughts can lead to a self-fulfilling prophesy.

If consumers are confident about our financial system, and confident about keeping their jobs, then we'll all be in a better position to weather any bumps along the road.

This column represents the views of TADA. Email president@tada.ca or visit tada.ca.

Bob Attrell, president of the Toronto Automobile Dealers' Association, is a new-car dealer in the GTA.

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