January 3, 2008 - 3:33 pm
By: Gary Norris And Eric Shackleton, THE CANADIAN PRESS
TORONTO - Chrysler Canada has overtaken Ford Canada as the country's second-largest seller of cars and trucks, probably for the first time ever, according to industry sales figures released Thursday.
Ford Canada has traditionally held the No. 2 spot in Canadian auto and light vehicle sales but lost ground to Chrysler last year, according to figures compiled by DesRosiers Research.
"I don't have very good historical data but I couldn't find another situation back to 1960, so this is likely the first time in the modern history of the automotive sector in Canada that Ford has not been in second place," DesRosiers said in a commentary.
Chrysler vehicle sales were up 5.5 per cent in 2007 while Ford Canada sales were down 2.2 per cent compared with 2006.
Overall, Canadian vehicles were up 2.4 per cent in 2007, rising to about 1.65 million units - the highest since volume topped 1.7 million units in 2002, according to DesRosiers.
However, the year ended on a sour note with December sales down 5.1 per cent compared with 2006.
The Canadian auto industry has been hit by a number of factors at the end of 2007, including increased cross-border sales due to a high Canadian dollar that made shopping in the United States more attractive and a pending drop in the federal goods and services tax, effective Jan. 1, that caused some buyers to put off their purchases.
Figures compiled by DesRosiers Automotive Reports show Chrysler's sales in December rose to 18,985, up from 18,589, while full-year volume rose to 232,688 from 220,553 the previous year.
Ford Canada, meanwhile, suffered an 11.9 per cent decline in sales to 15,111 last month from 17,151 in December 2006. For the full year, sales dropped to 223,773 from 228,878.
General Motors maintained its position as Canada's No. 1 seller of cars and light trucks, despite a huge drop in volume last month.
The company, based in Oshawa, Ont., sold 25,579 cars and light trucks in December, down 28.2 per cent from the year-earlier period. For the year, GM's sales fell by 4.1 per cent to 398,545 in 2007.
Marc Comeau, GM Canada's vice-president of sales, explained that GM has continued reducing its low-profit sales to rental fleets, and "while this strategy has resulted in some overall sales declines we are experiencing good retail sales performance, higher residual values and solid sales from our recently introduced cars and trucks."
At Chrysler, year-over-year sales were higher in every month of 2007 as the automaker introduced nine new models and also steered away from rental-fleet sales. Its overall sales increase enabled it to boost its market share.
Jeep division sales surged 62 per cent to a record 47,693, while Canadians bought 56,572 Dodge and Chrysler minivans, the company said.
For General Motors, the dismal December numbers included sales of 9,678 passenger cars, down 42.4 per cent from December 2006. About half of this decline was attributed to the reduction in fleet sales, with part of the rest of the slump blamed on tight inventory amid intense competition for fuel-efficient models.
Purchases of GM trucks, including pickups and sport utility vehicles, declined 15.9 per cent to 16,412.
Comeau noted that the entire industry in Canada had "an interesting ride" in the fourth quarter of 2007.
He said overall sales were down about 4 1/2 per cent from a year earlier as the record high loonie prompted many consumers to "sit on their hands" amid doubts that Canadian prices were fair compared with U.S. levels.
"There was some fact and there was some fiction," Comeau said. Some high-end vehicles were overpriced in Canadian-dollar terms, he said, "and the entire industry, principally at the beginning of December, came in with substantive cash-price adjustments."
For lower-priced vehicles, he insisted, only a "revamp of communications" by all carmakers was needed to get across the message that Canadian prices are competitive.
Among Japanese automakers, Toyota held onto its fourth place standing behind GM, Chrysler and Ford, reporting a 24.6 per cent rise in sales from December 2006, and a 2.3 per cent increase in full-year volume to 187,938 last year, up from 183,779 in the previous year.
GM's market share dropped to 24.1 per cent in 2007, down from 25.7 per cent the previous year, while Chrysler's rose to 14.1 per cent up from 13.7 per cent, Ford's fell to 13.5 per cent from 14.2 per cent, and Toyota's remained at 11.4 per cent.
Mazda set its fourth straight annual sales record with 86,659 vehicles, up seven per cent from 2006 including a four per cent year-over-year rise in December.
Over at Honda, sales rose 9.7 per cent last month over December 2006, and increased 3.1 per cent overall for 2007 from the previous year.
Nissan reported a 7.2 per cent increase in sales in December last year over December 2006, and a full-year volume increase of 16.7 per cent to 70,027 from 59,976 units.
From Germany, Volkswagen sold 35,123 units during 2007, up 5.1 per cent, propelled by solid sales of its cut-price City Golf and City Jetta.
In the rental-car space, GM's December deliveries were down by half from a year ago to about 5,000 vehicles, Comeau said.
Instead of buying 90 per cent of their cars from the Detroit Three, rental companies will "expand their wings and bring other players in," he predicted.
"Some of our Japanese import players and the Koreans have all indicated an interest to go and sell cars into that industry - and frankly, from our perspective, the more players that are in there, the better."
Figures from DesRosiers Automotive Reports showed sales were up for the year to 1,653,362, a 2.4 per cent increase and the second best year on record.
Only Ford, Jaguar, Volvo and General Motors saw sales decline in 2007. All others were up substantially with many companies setting new sales records like BMW and Toyota/Lexus to name only a few.
Passenger car sales fell nearly one per cent to 860,968 units from 867,706, while light truck volume increased to 792,394 units from 746,994, an increase of 6.1 per cent over the previous year.
For the month of December 2007, passenger car sales declined 15.9 per cent to 52,978 units from 62,980 the previous year, while light truck volume rose 5.6 per cent over December 2006.
December sales were "down despite massive inventive money pumped into the market by almost all OEMs," said DesRosiers.
"Consumer fatigue from almost a decade of strong sales is the likely cause and this therefore does not bode well for sales in 2008," he said.