OBSERVATIONS MAY 2013

Vehicle sales in North America have recovered well from the late decade trough, and most analysts are bullish out to the end of the decade. Normally, this would bode well for Canadian vehicle and parts producers. However, manufacturing in this country is not safe or sustainable in its present form. Growing – or even maintaining – our present share of the global automotive assembly market will require a wholesale rethink of our country’s automotive investment strategy.

In this month’s Observations, we’re looking at key industrial indicators in order to track and understand the decline in our vehicle parts and assembly sectors. From production volumes to per-vehicle Canadian content to capital investment levels (among many other metrics), we note that present declines are not cyclical but rather the result of fundamental changes in the geographic structure of North American manufacturing.

DAC offers regular coverage and discussion of topics related to vehicle and parts manufacturing, federal and provincial industrial policy and other topics of relevance to Canadian automotive industry participants in our DesRosiers Automotive Reports and AutoWatch newsletters. Contact Pina Vaccaro (905-881-0400 x.18) for pricing and subscription information.

CANADIAN SALES APRIL 2013

The Canadian light vehicle market surged forward last month, thawing out after a slow winter to show an 8.9 percent year-over-year gain in April. Sales were sufficiently brisk to reverse the negative year-to-date trend that developed during Q1 2013; a YTD gain of 1.4 percent now holds for the total market, propelling the SAAR to a 2013 high of 1.74 million units.

Full-line American and Japanese brands enjoyed sales growth last month, while Korean OEMs and some prominent luxury players failed to capitalize on the market’s momentum. Ford (27,895 units / +15.5%) charted the highest sales total in April, followed by Chrysler (25,675 units / +5.0%) and General Motors (25,071 units / +18.9%). General Motors’ performance is particularly notable as it represents the company’s highest units total since June 2011 and its strongest year-over-year percentage gain since March of the same year.

Japanese brands Honda/Acura (15,343 units / +19.9%), Toyota/Lexus (20,089 units / +7.2%), Nissan/Infiniti (8,078 units / +16.8%), Subaru (3,562 units / +29.4%) and Mitsubishi (2,265 units / +73.4%) posted respectable growth. The market also buoyed Volkswagen (6,248 units / +11.2%) but failed to provide much boost to Hyundai (13,517 units / -5.5%) or Kia (7,581 units / -5.4%). Both Korean brands have now lost roughly half a point of market share apiece on a year-to-date basis, bleeding some of the gains won from Japanese manufacturers over the last five years.

Strong Western sales combined with relative economic stagnation in the populous Central Canadian provinces have altered the sales mix in the still-strong luxury segments. As such, BMW/MINI (-2.1%) and Mercedes-Benz/smart (-14.9%) saw slightly negative returns in April; Audi (+6.1%) sold well last month but the brand’s YTD performance remains below 2012 levels.

OBSERVATIONS APRIL 2013

While varying tremendously in size, segment preferences and brand allegiances, certain streaks of sameness run through all of Canada’s regional vehicle markets. These characteristics are unique to the Canadian market and distinguish our habits from those of buyers in the United States.

In this month’s Observation, we’re taking a look at macro-level trends in the Canadian and American vehicle markets in order to better understand the regional particularities that bind together our ten provinces. In appreciating these differences, we’ll also see why it’s beneficial to manage Canadian sales operations locally instead of centralizing control in a foreign head office.

DAC offers regular coverage and discussion of topics related to new vehicle sales trends, regional market particularities and other topics of relevance to Canadian automotive industry participants in our DesRosiers Automotive Reports and AutoWatch newsletters. Contact Pina Vaccaro (905-881-0400 x.18) for pricing and subscription information.

CANADIAN SALES MARCH 2013

Last month, the Canadian light vehicle market rang up a sales total nearly identical to that achieved in March 2012. March 2012 was the best March sales total on record, so the 2013 performance is certainly encouraging. Industry sales declined just 0.7 percent, with a very strong total of 156,680 units sold last month versus 157,749 sold one year earlier.

That nearly identical total masks a number of market share shifts, however. Of note was Chrysler’s 7.0 percent gain, helping the Detroit-based manufacturer improve its total YTD market share to 16.3 percent (from 15.3% at this point in 2012). Ford (+1.7%) maintained its March position but continued to ride earlier Q1 gains, also gaining a point of market share (up to 16.2% from 15.2% last year). General Motors’ (-10.9%) long term slide continued, with slower March sales contributing to a small loss of YTD market share (down to 13.5% YTD from 13.8% in 2012).

The uneven performance of the Japanese manufacturers in 2012 continued last month, with Honda/Acura (+5.5%) and Toyota/Lexus (-6.1%) seeing opposite results in the March marketplace. Both high volume Japanese manufacturers finished the quarter with market share losses, Toyota/Lexus experiencing a more pronounced 0.9 point slide versus Honda’s 0.5 point YTD decline. Honda/Acura’s gains were isolated entirely to the Acura luxury brand, with mainline Honda models pacing last year’s March total almost directly. Toyota/Lexus, on the other hand, saw similar volume reductions across both Toyota and Lexus brands. Lower volume Japanese manufacturers Mazda (+4.8%) and Subaru (+11.7%) showed gains in March sales, Q1 totals and market share.

Korean powerhouses Hyundia (-4.7%) and Kia (-11.3%) both struggled to match impressive 2012 performances, and have lost market share over the quarter.

Luxury markets outperformed their mainstream counterparts by a considerable margin in March. European luxury players Audi (+3.2%), BMW/MINI (+8.9%), Land Rover (+26.6%), Mercedes-Benz/smart (+12.3%) and Porsche (+33.5%) gained sales and share in segments that continue to impress with steady growth. Luxury remains a small and highly regionalized – but profitable and influential – part of the market.

OBSERVATIONS MARCH 2013

The types of vehicles preferred by consumer groups in any given province vary greatly. Vehicle sales mixes represent an intriguing brew of attributes informed by local cultural, economic and population density trends, and stark differences in these sorts of regional characteristics breed the dissimilar traffic one encounters in geographically distant areas.

In this month’s Observations, we take a closer look at the sales trends, segment preferences and brand allegiances that define vehicle sales in Canada’s various regions. From British Columbia’s insatiable appetite for luxury vehicles to Eastern Canadians’ appetite for C and D-size Korean cars, we discuss each regional market’s unique characteristics in the context of the wider Canadian whole.

In addition to provincial vehicle sales preferences and trends, DAC offers regular coverage of a variety of other issues in the new and used vehicle markets, as well as sales performance metrics and market forecasts in our DesRosiers Automotive Reports and AutoWatch newsletters. Contact Pina Vaccaro (905-881-0400 x.18) for pricing and subscription information.

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