Sales of new autos sink

YURI GRIPAS/REUTERS

Chevrolet Equinoxes are seen at a dealership in Silver Spring, Maryland, July 1, 2008.

Tony Van Alphen

BUSINESS REPORTER

A collapse in truck sales at industry leader General Motors pulled down the auto market in Canada last month as well as expectations for the remainder of the year.

Sales and leases of new cars and light trucks slipped 5.7 per cent, or more than 9,000 vehicles, to 159,529 in June from the same month last year, manufacturers reported yesterday.

Analysts said soaring gasoline prices drove consumers away from trucks and sport utility vehicles to smaller, more fuel-efficient cars.

That left several automakers unable to meet new demand for smaller cars and hurt overall business. It also will likely result in some pent-up demand for cars in the next few months, but industry watchers said it won't be enough to stop a downward trend.

"The market is slowing, though, and we don't expect the strong sales from the early months of the year to continue," analyst Dennis DesRosiers said. "We still think that come the end of the year that sales will be slightly behind last year's number."

Despite lower sales in the past few months, sales for the first half of the year are up 2.4 per cent to 883,007 vehicles. Carlos Gomes, an auto industry specialist at Scotia Economics, said last month's results also showed offshore based companies, which offer more fuel-efficient vehicles, outperformed their North American rivals.

GM said its overall sales tumbled 23.8 per cent to 32,355 last month. But truck sales, including sport utes and pickups, plunged 35.3 per cent.

Despite a 19 per cent jump in sales of the popular Focus compact, Ford's overall sales in Canada fell 13.7 per cent to 22,001 in June.

Chrysler Canada eked out a gain of less than 1 per cent to 22,048. It marked the 23rd consecutive month that the company has reported an increase.

Meanwhile, offshore-based players such as Toyota, Nissan and Hyundai posted gains because of strong lineups of small cars.

Toyota said its sales, including its Lexus luxury brand, increased 8.8 per cent to a record 22,428 vehicles in June. There is also growing evidence of surging growth in the super fuel-efficient hybrid market. For example, Toyota said sales of its hybrids soared 77 per cent to 1,705 last month.

Nissan's sales, including the luxury Infiniti brand, climbed 9 per cent to 7,168, while Hyundai's volumes climbed 6.2 per cent to 8,049 last month.

BMW's sales, including Mini cars, shot up 12 per cent to a record 3,564. But Honda's sales, including Acura luxury vehicles, fell 2.3 per cent to 16,518, while Mazda's deliveries dropped 6.1 per cent to 8,510.

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