CANADA: Big Three's January sales plummet but analysts still predict a record year - report
Sales by Canada's 'Big Three' fell dramatically in January, failing to keep up with the pace set last year by cut-rate incentive packages, Reuters reported.
Analysts, unsurprised by the precipitous drop, still predicted a record year for sales as consumers advance plans for new vehicle purchases while deals are still available, Reuters added.
"The year-over-year comparison will look like a large decline, but keep in mind, January 2002 was actually the all-time high for Canadian sales for any month. That will make it seem actually weaker than sales actually are," Carlos Gomes, an economist at Scotiabank in Toronto, told Reuters.
According to the news agency, Gomes said car sales for December 2002 -- the second-best month on record -- were also "artificially high" as the manufacturers boosted incentives in the last month of the year to gain market share. The packages included low financing rates as well as attractive incentives.
General Motors of Canada sold 25,707 vehicles in January, down 33.7% from 38,756 for the same period last year, Reuters said, adding that total GM passenger car sales for January slipped 33.1% to 13,685 units from 20,452, while truck sales dipped 34.3% to 12,022 units from 18,304 for the same time last year.
Reuters said that Ford of Canada sold 15,712 new Ford and Lincoln vehicles in January, down 6.7% from 16,848 for the same month last year. Truck sales fell 3.2% to 11,011 units from 11,373 for the same time last year, while car sales dropped 14% to 4,701 from 5,475 in the period last year, Reuters added.
DaimlerChrysler sold 13,885 vehicles in January, a 23.8% drop from last year's record monthly total of 18,217, Reuters said.
According to Reuters, DaimlerChrysler truck sales suffered the largest drop, down 26.6% to 10,324 from 14,058 one year ago, while car sales slid 14.4%, to 3,561 from 4,159 last January.
Despite the dip in sales in January, Gomes still sees good times ahead for the Canadian vehicle industry this year as the attractive deals continue, Reuters said.
"Really the story, if you are looking at it on a year-over-year basis, is that we will probably still see a record high for 2003 just because the fundamentals are very, very strong," he told the news agency.
According to Reuters, Gomes predicts record sales of 1.71 million in 2003, up from 1.7 million last year.