Vehicle sales plunged 12 per cent in Canada last month from year-earlier levels, prompting industry officials to blame the sixth successive monthly slide on economic fears and a saturated new vehicle market.
Sales slumped to 82,856 last month from 93,636 in January, 2003.
That's the worst January since 1998 and means sales have risen in just two of the past 13 months.
“Canadians overbought the last two years and they're sitting on their hands,” said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont.
Canadians aren't like Americans and don't have two, three or four vehicles in their driveways unless they need them, Mr. DesRosiers said Tuesday.
“It's a pure replacement demand kind of situation.”
In the United States, the ratio of vehicle ownership to members of the driving age population is greater than one to one. In Canada, just 69 per cent of the driving age population owns a vehicle.
The Canadian number has barely budged since 1990, Mr. DesRosiers said. It stood at 69.4 per cent at the end of 2003, compared with 69.2 per cent in 1990.
Michael Grimaldi, president of General Motors of Canada Ltd.,noted that sales slowed dramatically in the second half of last year from year-earlier levels.
“We think that slowdown did and has continued into January,” Mr. Grimaldi said Tuesday. “The strength of the new product and all the incentives are coming up against some pretty stiff headwinds here in Canada.”
Consumers appeared to be weighed down with concerns about the Canadian dollar and interest rates, he said, although he applauded the Bank of Canada's move last week to cut rates.
“Hopefully we're going to get that Canadian economy, which seemed to have slowed in the latter part of the last year, back accelerating more in parallel with the potential strength of the U.S. economy south of the border,” he said.
GM, however, was one of the bright spots in the Canadian market last month with a 2-per-cent gain from January, 2003. The world's largest auto maker received a boost from such new Chevrolet cars as the Aveo, Optra and Epica, which represented 1,800 sales in the month. GM's overall sales rose to 26,330 from 25,707.
The only other winners among the major companies were Mazda Canada Inc. and Toyota Canada Inc.Mazda had the best performance among the larger companies with a 31-per-cent rise to 4,463 sales from 3,414.
Toyota posted a 5-per-cent sales increase that gave the auto maker its best January on record.
Sales tumbled at Ford Motor Co. of Canada Ltd., and DaimlerChrysler Canada Inc.
Ford's sales plummeted 33 per cent from year-earlier levels — to10,483 from 15,712. Car sales dropped 47 per cent to 2,473 from 4,701. Toyota, Mazda and Honda Canada Inc., all surpassed Ford in car sales.
They also outperformed DaimlerChrysler on the passenger car side. Dodge and Chrysler brand car sales tumbled 23 per cent to 2,746 from 3,561. Total Dodge and Chrysler sales fell 12 per cent to 12,224 from 13,885.
