Deals spur January vehicle sales
GREG KEENAN
Globe and Mail Update
February 1, 2008 at 6:28 PM EST
Canadians surged into car dealerships last month and drove off in near-record numbers, pushing the industry to its second-best January sales performance.
Auto makers sold 13 per cent more vehicles last month than they did a year earlier, with strong performances by Honda Canada Inc. and General Motors of Canada Ltd. leading the way among the top five companies in Canada, but with some smaller players also setting records for the month.
Canadians bought 103,137 cars and trucks, compared with 91,398 in January, 2007.
“We suspect that the primary reasons for these healthy numbers include the number of significant new models in the market, very attractive pricing and the broad economic stimulus pumped into the economy at the federal level,” said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont.
Honda's sales soared 68 per cent, partly on the strength of a doubling in sales of its compact Civic.
GM pointed to its Malibu mid-sized sedan, sales of which also doubled.
The Canadian units of the Detroit Three outperformed their parent companies in the United States, where the housing crisis sent pickup truck sales tumbling for all three companies.
Ford Motor Co. of Canada Ltd. reported a 10-per-cent sales jump, while Chrysler Canada Inc. posted a 3-per-cent rise.
General Motors Corp. was the only one of the three to report a gain in U.S. deliveries, with a 2-per-cent rise in overall sales. Sales also fell for Honda Motor Co. Ltd. and Toyota Motor Corp., as the U.S. economy continues to worsen.
The challenging U.S. environment isn't likely to improve for a while, Ford Motor Co. group vice-president of marketing James Farley said in a statement.
In Canada, sales jumped 4 per cent for Toyota Canada Inc., giving that company its best January performance yet, but that was good enough only for fifth spot in the highly competitive Canadian market.
That standing may be one reason Toyota announced yesterday it is cutting prices on 16 of its Toyota and luxury Lexus models
The trims range from $750 on the subcompact Yaris, to $8,100 on Lexus GX sport utility vehicles.
The auto maker said it offered rebates, subsidized lease deals and gas cards last year as incentives to buyers when the Canadian dollar rose, which led to a price gap between vehicles sold in Canada and those sold in the United States.
Those incentives are being converted into price reductions, Toyota said.
Dealers said Toyota's move is likely to be followed by other companies, many of which were offering temporary rebates and incentives in the fourth quarter of last year in the face of lower U.S. prices and record imports by Canadians of vehicles purchased in the United States.
Mr. DesRosiers said the “deep discounting” from auto makers last year kicked into high gear and helped spark the highest January sales since 2002.
