Incentives drive auto sales
Jul. 04, 2011
The return of employee pricing incentives at some auto makers drew Canadians back to dealers’ lots in June, propelling vehicle sales up 7 per cent to the highest level since the pre-recession days of June, 2007.
Nissan Canada Inc. and Chrysler Canada Inc. posted the biggest sales gains as dealers sold 165,077 vehicles last month, compared with 154,693 a year earlier. Sales for those two companies soared 40 per cent and 27 per cent respectively, but Hyundai Auto Canada Corp. and several luxury brands also had strong months.
“If you get some incentives out there, Canadians are going to be interested,” said Bank of Nova Scotia economist Carlos Gomes, who follows the auto industry closely.
The jump in June was a rebound from a poor performance the previous month when May sales were the worst in that month since 1997.
The June figures show that May was likely an aberration, Mr. Gomes said, when skittish buyers stayed home as they fretted about negative headlines on the economy.
“With manufacturers maintaining enhanced incentives in July, the Canadian auto market promises to remain hot through the summer,” Mr. Gomes said in a note.
Nissan Canada president Allen Childs said strong marketing programs helped the auto maker record the best month in its history in Canada, marking the first time it has sold more than 11,000 vehicles in a single month.
Chrysler posted a 27-per-cent gain, which led the Canadian units of the Detroit Three and helped them boost their market share to 51.5 per cent last month, compared with 49 per cent in June, 2010.
Ford Motor Co. of Canada Ltd. recaptured first place with a 6-per-cent gain, allowing it to record its best June since 1989. Sales for General Motors of Canada Ltd. rose 8 per cent.
BMW Canada Inc. Mercedes-Benz Canada Inc., Hyundai and Porsche Canada all reported the best June sales in their history.
Mr. Gomes noted that sales would have been higher last month if Honda Canada Inc. and Toyota Canada Inc. had reported normal sales figures. Both companies are still recovering from the effects of the March earthquake and tsunami in Japan. The disasters battered parts suppliers in Japan and affected the North American operations of Honda and Toyota more than other Japan-based auto makers.
Full production will resume at Toyota’s North American plants in September, but not until later than that at Honda’s plants in Canada.
The production cuts led to a 29-per-cent slump in Toyota’s sales in Canada last month, pulling it below Hyundai, which grabbed fourth spot in the monthly sales race behind Ford, GM and Chrysler.
Honda’s sales fell 19 per cent. Honda fell below Hyundai and Nissan to rank seventh.