Sales in Canada dropped 3.1% in May compared to the same month a year ago, led by drops at each of the Big Three, the Canadian Press (CP) reported.
Go deeper with GlobalData
Sales by Mitsubishi, Volkswagen and Suzuki were also down in May. Toyota, Honda and Nissan all gained market share, but even their May performances fell below the gains they’d been accomplishing earlier this year, the report said, adding that it was the worst Canadian new vehicle sales performance since 1999 for the month of May – traditionally the biggest selling month of the year for dealers – despite major incentive programmes offered to consumers.
In response to slumping sales, GM said it will reduce third-quarter production in North America by 9% and Ford will trim its output on the continent by 2%. Those cuts could involve Canadian operations and could also impact Ontario-based parts manufacturers, CP said.
Auto industry analyst Dennis DesRosiers told CP that the GM and Ford production cutbacks forecast for the third quarter could have a significant impact on the central Canadian economy – Ontario is Canada’s auto manufacturing heartland, and 90% of vehicles made in the province are sold in the US.
“If Americans don’t buy vehicles, Canadians don’t produce vehicles,” DesRosiers reportedly said. “When the American market is soft, we face layoffs, and when we face layoffs, it softens our economy.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe Canadian Press said DesRosiers predicts overall vehicle sales in Canada will fall up to 3% in 2005 below last year’s 1.534 million units.
“It’s not because the Canadian market is that bad; it’s because the US market is that bad and so much of our Canadian economy is tied to automotive,” he told CP.
GM Canada spokesman Stew Low told CP the automaker’s Oshawa, Ontario, operations are currently producing at a robust pace. Workers at its truck plant are working overtime as sales of full-size GM pickups remain solid. Lower light truck sales by GM in the United States reflect softening sales of sport utility vehicles, which are not made in Canada, Low reportedly noted.
CP said Ford’s assembly plant in Oakville, Ontario, has been operating at half capacity since October, as Freestar sales have failed to strengthen in a competitive minivan market. It’s operating on one instead of two shifts, with 3,900 production employees working two weeks on, two weeks off, through to the end of this month.
The plant will be down several weeks in July for pre-scheduled summer vacation but beyond that, Ford Canada spokesman John Jelinek told CP no decisions have been made on Oakville’s production, nor its St. Thomas, Ontario, factory that makes Crown Victoria and Mercury Grand Marquis large sedans.
According to the Canadian Press, figures compiled by DesRosiers suggest 157,551 vehicles were sold in Canada last month, down from 162,588 in May 2004.
For the year to date, sales in Canada remain up 1% at 647,097, compared with 640,477 units sold in the January-May period last year, the report said.
CP said Ford and DaimlerChrysler saw their Canadian sales drop by double-digit percentages in May – 10.5% and 12.9% respectively – while market leader General Motors saw its May sales slip 3.7%, CP said.
Toyota, Honda and Nissan reportedly continued the trend of Asian automakers stealing more market share from the Big Three. CP said Toyota’s sales fell 0.7%, but it boasted that it achieved all-time record Canadian market share in May of 12.4%, while Honda and Nissan had May sales gains of 7% and 3.5% respectively.
The big sales winner was Hyundai, with its new Tucson SUV selling well and propelling the South Korean company’s overall Canadian sales up 28.6% in May and 14.6% on the year, the Canadian Press said.
