RICHMOND HILL, Ontario -

For a month that analyst Dennis DesRosiers described as unsteady for auto market rehabilitation, new-vehicle sales in Canada dropped more than 4 percent in February, marking the first hiccup in quite some time.

Specifically, there were 96,006 new units sold last month in Canada, softer by 4.2 percent when compared to February 2010.

“Back to the drawing board,” said DesRosiers, who is the president of DesRosiers Automotive Consultants. “After 14 consecutive months of recovery from year ago months the Canadian automotive market stumbled in February with sales down by 4.2 percent.”

He also pointed out that year-to-date sales through February (180,515 units) are off 0.7 percent from last year’s pace thanks to the sluggish February 2011 totals.

And while it’s not clear if the Canadian market has now entered a period of softness or not, DesRosiers emphasized that the results show that a sales recovery can be delicate.

“We’ve been talking about a halting recovery for quite some time and quite frankly we don’t know whether this is the beginning of some lean months or not, but February does clearly demonstrate how fragile the automotive recovery is in Canada,” DesRosiers noted. “We have forecast the market to be up slightly this year, but we’ve said all along that it wouldn’t surprise us if the market were down slightly.”

And while he said that February is a prime example of this, DesRosiers cautioned against making too much out of the decline since February is the year’s shortest month.

Not to mention, the seasonally adjusted annualized rate was stronger than December and January levels, despite weakening from the year-ago rate.

“The SAAR takes seasonal variations out of the equation and is, in some respects, a cleaner way to look at the market,” DesRosiers stated.

Moving along, DesRosiers offered a breakdown of February’s results.

Interestingly enough, trucks had a stronger year-over-year performance in February — up 2.3 percent at 56,492 units sold — than did passenger cars, which were off 12.2 percent at 39,514 units sold.

This odd trend happened in spite of rising fuel costs.

“High gas prices usually mean a strong car market and weak light truck market,” DesRosiers commented. “The exact opposite happened in February as light trucks did better than passenger cars … go figure.”

He added: “This is an unusual occurrence given high gas prices and we would expect passenger cars to begin to seriously out sell light trucks if gas prices continue to escalate.”

In what seems another unusual trend, Ford —  which saw its sales dip 10.3 percent year-over-year, but led the industry at 16,066 units sold — experienced the reverse dynamic regarding car versus truck numbers.

DesRosiers pointed out that Ford’s entire softening stemmed from the truck side, while they showed a significant lift in passenger car sales.

“This is the exact opposite from the market as a whole which saw passenger cars sales seriously underperform relative to light truck sales,” he shared. “Most of the problems in light trucks, for all players, came in the last 10 selling days when higher gas prices hurt demand.

“Incentive spending is also causing a lot of disruption in the light truck market,” DesRosiers continued. “Incentives forwarded a lot of light trucks sales into last fall.”

Continuing along, DesRosiers also pointed out that import brands edged their Big 3 rivals in monthly sales. The last time this happened was “about a year”
ago.

Sales for both the Big 3 and imports were down, but decrease was less steep for imports (down 3.7 percent at 52,491 units sold) than it was for the Big 3 (down 4.8 percent at 43,515 unit sold), he pointed out.