Auto sales bounce back in June

2010 Ford Focus

Tony Van Alphen

BUSINESS REPORTER

Canada’s auto market bounced back in June after its recovery seemed to have stalled.

Sales of new cars and trucks – a good indicator of the economy’s health - jumped 11.6 per cent or more than 16,000 to 154,565 vehicles last month from the same 2009 period, manufacturers reported Monday.

The strong June performances followed two months of minor increases which left analysts expressing concerns that the market recovery was losing momentum after pulling out of the deepest recession in decades last year.

“June puts Canada back on track for a respectable sales year,” said veteran industry watcher Dennis DesRosiers.

With Ford, Chrysler and Hyundai fuelling the improvement, sales for the first half of the year have climbed 9.1 per cent or more than 65,000 to 786,402 vehicles from the same period last year. The market has posted increases for seven consecutive months.

Ford Motor Co. of Canada, whose fortunes have soared in the last year because of better public recognition for quality, fuel efficiency and selection, remained the industry leader for June and the first half of 2010. Its sales climbed 16 per cent to 31,707 during June, the company’s best monthly performance in 10 years.

In the first six months, Ford sales have shot up 23 per cent to 132,761 on the strength of vehicles such as the Fusion, Focus and Taurus cars, Escape sport utility vehicle and F-Series pickup trucks.

Ford is also attempting to maintain and expand its sales edge over perennial leader General Motors by adding an “employee pricing” program to its incentive offers during the next two months. The program means customers can get thousands of dollars of the same savings as company staff when they buy new vehicles.

Chrysler Canada, whose sales and inventories plunged during the first half of 2009 because of a restructuring, said business doubled this June to 18,502 from the same month last year. Sales for the first six months jumped 36.3 per cent to 105,474.

“We are nailing it,” said Chrysler president Reid Bigland about the company’s growth and profitability.

General Motors of Canada reported that its overall sales jumped 15.2 per cent to 25,725 in June despite the elimination of the Pontiac, Saturn and Hummer brands.

GM’s sales are still down 8.3 per cent to 123,488 in the first six months but it remaining core brands of Chevrolet, GMC, Buick and Cadillac are showing increasing strength. Those brands soared 53.5 per cent in June and 20.9 per cent in the first half.

DesRosiers noted that the Detroit-based auto makers, Ford, General Motors and Chrysler outperformed the offshore based companies for the second consecutive month for the first time since the early 1990s.

“It appears the Detroit Three have stabilized their market share in Canada,” he said.

Sales at Toyota Canada, which is trying to recover from a series of recalls, slid 13.8 per cent to 16,036 during June. First-half volumes including the Lexus luxury brand dropped 4.3 per cent to 93,272 from the same six months in 2009.

Hyundai Auto Canada, whose performance has soared in the last few years, said deliveries rose 13.8 per cent to a record 11,501 vehicles during the month. The company’s volumes for the first half climbed 18.6 per cent to 62,214, another record.

Sales at Nissan Canada including the Infiniti luxury brand improved 8.6 per cent to a record 8,057 vehicles in June. Its volumes improved 5.2 per cent to 41,516 in the first half.

Mazda Canada’s deliveries increased 7.6 per cent to 7,218 last month and 5.3 per cent to 40,859 in the first half.

Kia Canada extended its streak of monthly increases to 18 as volumes jumped 12.8 per cent to 5,864. The result is the best in the company’s history and boosted business for the first half of the year to 26,506, a 20-per-cent improvement from the same 2009 period.

Volkswagen Canada’s monthly sales dipped 0.8 per cent to 4,479 but first half business still climbed 20.5 per cent to 22,885. Deliveries at Subaru Canada rose 31.3 per cent to 2,316 in June and 32.4 per cent to 13,348 in the first six months.

In the U.S., sales increased 14 per cent to 983,821 in June but the industry’s recovery has slowed since the recession which was deeper than in Canada. That’s not good for auto makers here who ship most of their output south of the border or parts suppliers who also rely on the U.S. market.

U.S. sales for the first six months have climbed 17 per cent to 5.61 million, which is below expectations.

SOME AUTOMAKERS RECOVER

Ford, Chrysler and Hyundai posted strong gains in the first half as the overall industry pulled out from a deep recession.

First Half % change

Ford 132,761 + 22.9

GM 123,488 - 8.3

Chrysler 105,474 + 36.3

Toyota 93,272 - 4.3

Honda 66,271 -5.1

Hyundai 62,214 +18.6

Source: Company reports

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