RICHMOND HILL, Ontario -
While it appears that the market “still has a long way to go,” the increase in Canadian new-vehicle sales during 2010 was stronger than what was expected going into the year, according to analyst Dennis DesRosiers. He attributes the sales uptick to the bevy of incentives offered from automakers.  
Specifically, there were 1.56 million new vehicles sold in Canada during 2010, a 6.6-percent uptick from the previous year, according to data provided by DesRosiers Automotive Consultants, the Association of International Automobile Manufacturers of Canada and the Canadian Vehicle Manufacturers Association.
While these results are stronger than 2009, the country’s new-vehicle market was still a far cry from the sales totals seen in prior years, DesRosiers suggested.
Furthermore, the market didn’t exactly close the year on a high note, as the seasonally adjusted annualized rate for new-vehicle sales dipped in the final two months. Sales for December were 111,661 units, up 0.4 percent from December 2009.
“2010 was healthy but still well below the levels achieved in 2005 to 2008. Canada still has a long way to go before we are totally out of this light vehicle sales slump,” said DesRosiers, president of DesRosiers Automotive Consultants. 
“Sales, however, were slightly better than what we and others forecast a year ago when we were predicting sales up only 2 or 3 percent,” he explained. “The reason is quite simple: incentives. I have never seen the level of incentives available to consumers during 2010 in my 40-plus years analyzing the market.”
In fact, incentives often exceeded $10,000, he pointed out. Furthermore, incentive levels for the overwhelming majority of automakers approached or hit record highs, according to DesRosiers.
The only major manufacturer that tended to show restraint with incentives than its peers was Toyota, he noted.
“They don’t seem to accept (at least not yet) that with their numerous recalls all year they essentially told consumers that they ‘where just another vehicle company,’ DesRosiers suggested. “When they owned the ‘best quality’ title they didn’t have to play the incentive game to the degree other OEM had to use them. Since they abdicated this title in 2010 and became just another vehicle company, they now need to offer incentives at the same level as all the other vehicle companies.”
He argued that not matching the other automakers incentive-wise hurt Toyota in 2010, as its full-year sales fell 16.2 percent and December sales dipped 45.3 percent year-over-year.
“They will argue that their product got a bit old and this is the reason for their decline and that in the next few years they will have all kinds of product updates coming to the market that will solve this issue,” he suggested. “I will argue that all the major OEMs have a lot of new product coming to the market, so Toyota is unlikely to get the lift in the market that they might expect unless they ‘play the game.’ I hope I’m wrong.”
Continuing on, the OEM he called the “big winner” of 2010 was Ford. It enjoyed a 19.1-percent uptick this year and was Canada’s top seller (moving 267,871 units), something that hasn’t happened in decades, DesRosiers pointed out.
“Indeed, the F-Series pickup trucks sold just under 100,000 units, which makes it the bestselling single model of vehicle in one calendar year in the entire hundred-plus year history of the automotive sector in Canada,” he noted.
Interestingly enough, acknowledging that “everyone points to Ford’s success, including myself,” DesRosiers went on to point out that Chrysler did well also. The automaker showed the strongest year-over-year improvement among domestics with a 25.7-percent gain in full-year sales, he reported.
“It was no more than 18 months ago that just about every one wrote Chrysler off as a lost brand. This year they increased market share (incentive-driven, mind you) and came within about 40,000 units of outselling GM,” DesRosiers highlighted. “They are definitely not a lost brand.”
Over at General Motors, sales reached 246,668 units for 2010, down 2.1 percent from 2009. But the automaker exceeded its goal of having market share of 15 percent (it came in at 15.8 percent) and closed the year with a month that saw sales moved ahead 7.1 percent on a year-over-year basis, an increase that was pushed by incentives, as well, DesRosiers pointed out.
“GM is likely happy with their performance this year,” he suggested.
And in further good news for the Big 3, they increased their market share from 43.8 percent from full-year 2009 to 46.2 percent, marking the first time in 15 years that they experienced a gain in market share, DesRosiers stressed.
Big 3 sales totaled 718,613 units for 2010, up 12.4 percent from 2009. Meanwhile, imports saw their sales climb 2.1 percent to 838,508 vehicles.
“For the first time since 1995, the Detroit 3 picked up market share from the import nameplates. After losing market share for 15 years in a row, we analysts had come to believe Detroit would eventually fade to black,” DesRosiers explained. “The restructurings at GM and Chrysler and the incredible turnaround at Ford clearly shows that Detroit still has a pulse.”