Toyota poised to jump past Chrysler as Canada's second largest automaker

[rickaren]

Toyota poised to jump past Chrysler as Canada's second largest automaker

Published: Sunday, January 04, 2009



Toyota Motor Corp. has eclipsed its previous record for annual sales in Canada and is poised to become the country's second largest automaker for the first time as the industry braces for a prolonged sales slump in the months ahead.

Canada's auto hierarchy appears set for a shakeup Monday, when automakers report December and year-end sales results.

Toyota said over the weekend that a preliminary tally shows the automaker sold more than 224,100 cars and trucks in Canada in 2008, an 11% increase over the year before. At that level, it will almost certainly widen the lead it built in the fall over Chrysler LLC and Ford Motor Co. and claim second spot in the annual sales rankings.

"This would be a first," industry analyst Dennis DesRosiers said in a recent note. "Chrysler on rare occasions has beaten Ford for the number two position but never has a [foreign-based manufacturer] come in second in the Canadian market."

General Motors Corp. is the largest automaker in Canada by sales volume and production output. Chrysler was number two last year but a pullback on leasing and a lack of subcompact model have hurt the company in recent months.

Toyota spokesman Sandy Di Felice said sales of the company's hybrids, like the Prius compact, rose 34% year-over-year. Several of the vehicles it builds in Canada, like the Corolla car and Lexus RX, posted double-digit sales gains in 2008 versus 2007, she said.

"Toyota's coming off great momentum and they have a strong product line," said Chris Travell, vice president of Maritz Research's Automotive Group in Canada. "It's just now a question of what's going to happen in the macro-economic environment. If the Canadian economy tanks, Toyota will not be immune from that. No one will be."

Japan-based Toyota is predicting it will post its first operating loss in 71 years as a global recession spooks buyers and the yen climbs versus other currencies. The automaker's new Venza crossover station wagon, marketed to active baby boomers and young families, will be sold exclusively in North America at a time when sales in the United States and Canada are weakening.

Vehicle sales for all companies combined fell 10% in Canada in November, the beginning of what analysts expect to be a much weaker retail environment in coming months. Carlos Gomes, economist at Scotiabank Group, predicts automakers will sell 1.67 million vehicles in Canada in 2008. Mr. DesRosiers's estimate is 1.65 million. Both analysts expect sales to fall by more than 100,000 units in 2009.

In September, Toyota announced it would delay indefinitely plans to ramp up a new Canadian assembly plant, in Woodstock, Ont., to full capacity because of the slowdown in U. S. sales. The factory opened with one shift of workers building 75,000 RAV4 sport-utility vehicles a year to start.

Frozen credit markets and a collapse in consumer demand for their product forced GM and Chrysler to plead for emergency aid from Washington and Ottawa to stave off bankruptcy. George Pipas, Ford's sales chief, said Friday he expects industry-wide U.S. sales to drop by about 35% year over year in December with no evidence of a turnaround for at least the next three months.

Ford is forecasting U.S. light vehicle sales will come in at 13.2 million units for 2008, a precipitous plunge from 2007's tally of 16.2 million units. The only other time automakers selling in the United States experienced a drop of that size over 12 months was during 1974 after the first oil crisis, Mr. Pipas said.

LINK:Toyota poised to jump past Chrysler as Canada's second largest automaker