A Lime Squeeze Metallic 2012 Ford Fiesta SE

Auto sales on track to best year since recession

Canadians shopping for new vehicles appear to have steered automotive sales in 2011 to their best year since the last recession. Overall light vehicle sales grew 1.8 per cent through the end of November, with December data expected later this week to fill out the final picture on how the year stacked up.

TORONTO — Canadians shopping for new vehicles appear to have steered automotive sales in 2011 to their best year since the last recession.

Overall light vehicle sales grew 1.8 per cent through the end of November, with December data expected later this week to fill out the final picture on how the year stacked up.

Automakers have seen uneven but rising sales this year, with growth positive one month and negative the next, as economic uncertainty pervaded consumer sentiment.

A total 1.47 million vehicles had been sold as of Nov. 30 — already surpassing the 1.46 million sold in all of 2009 — the worst sales year for the industry since 1998, according to data released by DesRosiers Automotive Consultants.

Sales are also ahead of the 1.45 million vehicles sold as of the end of November 2010, giving the industry momentum to beat the 1.56 million vehicles sold last year.

Still, 2011 sales volumes are well short of their pre-recession levels — 1.64 million units in 2008 and 1.65 million in booming 2007.

Strong sales, especially trucks, in Western Canada where the booming resource economy boosted incomes and consumer confidence, helped prop up slumping sales in Eastern Canada, where economies were slowing down. In the auto manufacturing hub of Ontario, sales grew slightly.

“We were hoping probably for a little bit better, but at this point any growth is good growth in the automotive market,” said Darren Slind, regional leader for Canada and Latin America at J.D. Power and Associates’ automotive division.

“But it’s not bad given the state of the economy and a lot of consumer uncertainty,” added Slind, who had expected sales growth of between two and three per cent this year.

Slind predicts 2012 sales will be largely in line with volumes seen this year as recession in Europe, slower growth in emerging markets and an uncertain economic and political climate south of the border continue to weigh on consumer sentiment.

Still, the Detroit Big Three have seen a turnaround since late 2008 when the financial crisis and global recession took a toll on sales, pumping out steady sales in 2011.

Chrysler and General Motors have been restructuring since being bailed out by U.S. and Canadian governments in 2011.

Many car buyers were extremely focused on fuel efficiency in 2011, especially in the spring when gas prices peaked at recent highs.

Like its Big Three rivals, Ford has also revamped its strategy — to focus on more fuel-efficient vehicles, a move that has paid off and helped keep it on pace to claim the title of Canada’s bestselling automaker in 2011.

It has edged up 0.2 per cent to claim 17.4 per cent of the Canadian market, according to DesRosiers. In the U.S., the company reportedly racked up more than two million vehicle sales in its best year since the recession hit.

Chrysler Canada had a robust sales year, grabbing 1.5 per cent more of the market to hold 14.6 per cent. Meanwhile GM Canada — once Canada’s bestselling automaker — lost 0.3 per cent of market share to cling to 15.3 per cent of the Canadian market.

Damiano Peluso, national automotive leader at PwC Canada, notes that gains by domestic automakers came at the expense of big market share losses at Japanese automakers, which experienced severe production setbacks due to Japan’s earthquake and tsunami in March.

“The disasters really had a larger impact that we thought they would,” he said.

For months, big automakers like Toyota and Honda saw year-over-year sales decline as they struggled to keep dealers stocked with inventory. But they have begun to see a turnaround, with Toyota and Honda each reporting double-digit sales gains in November.

Peluso expects a continued rebound at Japanese automakers in December and into the new year which, along with strength at the North American producers, will help drive growth of two to four per cent next year.

Although consumers will face continuing economic uncertainty in the opening months of 2012 which could deter them from spending on big ticket purchases like cars, Peluso expects economic conditions and consumer confidence to improve midway through the year.

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