September's auto sales slide 2.9%
First decline since March is led by GM and Honda; analyst suggests a link to the U.S./Canada price gap
Tony Van Alphen
Business Reporter
Declines at General Motors and Honda have pulled down overall monthly auto sales in Canada for the first time in half a year.
Sales and leases of new cars and light trucks dropped 2.9 per cent, or almost 4,000 to 131,827 in September from the same period last year, auto manufacturers reported yesterday.
It marked the first time that sales have fallen since March. Except for slight decreases in February and March this year and September's bigger decline, auto sales have climbed every month since July 2006.
Despite lower sales last month, business for the first three quarters of the year has still improved almost 4 per cent, or about 49,000 to 1.295 million vehicles from the same nine months in 2006.
Carlos Gomes, senior economist at Scotiabank Group, said the decrease reflects consumer concern over the fallout from troubles in the subprime mortgage sector in the U.S. and volatility in global financial markets in recent months.
However, Gomes added that he expects Canadian auto sales to bounce back soon because employment growth, a key factor driving vehicle sales, remains healthy.
Auto analyst Dennis DesRosiers said he thinks domestic manufacturers may be experiencing a consumer backlash because a higher dollar, which is now at par with the U.S. greenback, has not resulted in a significant narrowing or elimination of the price gap on vehicles between the two countries.
"This could be one of the reasons the market was down," said DesRosiers, president of DesRosiers Automotive Consultants. "I'm sure some consumers just sat on their hands."
He noted the Canadian economy remained strong in September and incentives to clear 2007 inventory flooded the market.
Sales at industry leader General Motors of Canada Ltd. dropped 6.4 per cent to 33,387 despite solid gains by the company's small cars.
"September was a challenging month in a highly competitive industry," said Marc Comeau, GM's vice-president of sales, service and marketing.
Business at Ford Motor Co. of Canada Ltd. also slid 9.5 per cent to 13,892 vehicles in September.
However Chrysler Canada said its Jeep models fuelled a 5.1 per cent increase in sales to 17,011 in September.
It marked the fourteenth-consecutive month that the company has improved business from the corresponding period a year earlier.
In addition to Ford and GM, other major manufacturers also reported sales declines. Honda Canada, including the luxury Acura brand, posted a 14 per cent plunge to 14,842 vehicles; Toyota Canada, including the Lexus brand, experienced a 1.8 per cent drop to 16,892 and Nissan, including the Infiniti brand, watched volumes slide 9 per cent to 6,418 autos.
Among gainers, Hyundai Auto Canada said its September volumes jumped 16 per cent to 7,080; business at Mazda Canada inched up slightly to 7,055; deliveries from Kia Motor Sales soared 34.8 per cent to 3,330 and sales at BMW Group including the Mini brand climbed 6 per cent to a record high of 2,249.
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Print | posted on Wednesday, October 03, 2007 4:38 PM