RICHMOND HILL, Ontario -
Though an initial glance at the Canadian new-vehicle market may suggest that November was quite robust, this strength is a bit deceptive, according to analyst Dennis DesRosiers, who said “there are some concerns” to be found when taking a closer look at the month’s sales.
Overall, there were 115,981 new vehicles moved in Canada during November, a gain of 13.6 percent year-over-year, according to the latest Market Snapshot from DesRosiers Automotive Consultants. Through 11 months of 2010, sales have hit about 1.45 million units, an improvement of 7.1 percent.
“Dig a little deeper and there are some concerns,” DesRosiers suggested.
“First of all, sales in November 2008 and 2009 were abnormally low due to the upheaval in our industry which started in September/October 2008 and continued until GM and Chrysler emerged from bankruptcy in late 2009,” he continued. “So any decent sale performance in November 2010 would have looked good.”
Looking at traditional sales trends from 2003 through 2010, he pointed out that typically the Canadian market moves between 115,000 and 120,000 new vehicles for this particular month.
As such, the 115,981 units sold in November 2010 comes in at the “low end” of usual range.
Not to mention, the month’s seasonally adjusted annualized rate for new-vehicle sales dropped 2.5 percent and came in at 1.567 million vehicles, DesRosiers highlighted. In October, the rate was 1.61 million units.
Giving some more perspective into the actual strength of the market, DesRosiers also reiterated that “incredibly generous” incentives were spotted in various areas of the market during the month,
“Given the incredibly incentive dollars in the market, I actually believe that November sales were disappointing,” he stated. “A number of full-line OEMs have been pushing the incentive button very hard lately.
“If it was a second tier OEM, then I could understand, but GM, Chrysler, Honda and Toyota have all been putting a lot money on the windshield and when they do it other companies like Ford have to follow at least to a degree,” DesRosiers added.
Interestingly enough, the impact of incentives is certainly seen when comparing truck sales and car sales. With hefty incentives on the truck side, their sales climbed double digits on a year-over-year basis to 64,986 units, while cars were relatively static with 50,995 vehicles sold.
“Much of this incentive money was on light trucks, so it isn’t surprising at all that light truck sales in November were up 26.6 percent, while passenger car sales for the month were flat at 0.4 percent,” DesRosiers noted. “The market goes where the money is!”
Breaking it down by automaker, he found that many were up by double-digit percentages on a year-over-year basis, with a few single-digit climbers sprinkled in. A few brands saw their sales drop, most notably Toyota (down 25 percent) and Lexus (down 18 percent), among the larger brands.
The heaviest gainer was Acura (up 54 percent with 1,449 unit sold), followed by Mitsubishi, which improved 48.4 percent to 1,742 vehicles sold.