Canadian new car sales skid 27.7 per cent in February; GM down 56.7 per cent

Canadian sales of new cars and light trucks plunged 27.7 per cent last month compared with a year ago, as General Motors of Canada saw its deliveries skid by a startling 56.7 per cent.

That placed the traditional market leader third in monthly sales, behind the Canadian subsidiaries of Chrysler and Ford. Activity of the industry as a whole was the weakest on a seasonally adjusted basis since the early 1970s.

Overall Canadian sales of passenger cars were down 29.9 per cent from a year ago to 40,786, while sales of light trucks _ pickups, SUVs and minivans _ dropped 25.2 per cent to 39,444, according to industry data tallied by DesRosiers Automotive Consultants. The total number of light vehicles sold last month, 80,230, was actually slightly higher than in January, when about 76,900 units were moved. And analyst Dennis DesRosiers noted that February 2008 was ``a blowout month'' with record sales, exaggerating the year-over-year slump.

While GM Canada's sales plunged to 11,381 from 26,309 a year earlier, Chrysler was last month's market leader with 11,923, down 27 per cent from February 2008. ``Our position as the No. 1 automaker this month clearly demonstrates the continued confidence Canadians have in Chrysler vehicles and in the company's future,'' declared company president Reid Bigland. ``There is no question that the current economic and automotive environment is challenging for all companies.'' Ford came second with 11,854 sales, down 15.4 per cent from a year ago. Toyota was down 26 per cent at 9,421 while Honda tumbled 43 per cent to 6,912. Both of those Japanese companies, like the Detroit Three, have major assembly operations in Ontario.

At General Motors, ``in addition to a planned reduction in daily rental volume, we faced some tough incentive competition that impacted our retail sales,'' marketing vice-president Marc Comeau said in a brief and subdued monthly statement. ``Stunning is the only word I can think of at this point,'' analyst DesRosiers commented on GM's slide from dominance. He said it appears to be the first time since 1949 that General Motors has not been the Canadian market leader, in what ``may be a watershed month in the Canadian and indeed the North American automotive industry.''

DesRosiers also noted that the Canadian market share of the Detroit Three as a group fell to an all-time monthly low of 43.8 per cent. The sales numbers cast additional doubt on the survival hopes of GM and Chrysler as they depend on billions of dollars of taxpayer aid in the United States and Canada. Last month's carnage was widespread, but South Korea's Hyundai jolted its sales up 30 per cent from a year earlier to 6,912. Germany's Mercedes-Benz increased its volume by 19 per cent to 1,419, and Japan's Subaru was up eight per cent to 1,263.

Among other Japanese makers, Mazda wilted 20 per cent to 4,666 and Nissan slipped 12 per cent to 4,288, while Germany's Volkswagen sagged 25.5 per cent to 1,721. Slack as last month's Canadian showroom action was, it compared favourably with the steepening slump in the United States. American volumes were the worst in more than 27 years as General Motors sales tumbled 53 per cent from February of last year while Ford fell 48 per cent, Chrysler lost 44 per cent and Toyota was down 40 per cent. In Canada, GM's passenger car sales fell 61 per cent and light truck deliveries were down 52 per cent, but General Motors ``remains the year-to-date market leader for sales in Canada and plans to maintain that position,'' Comeau stated.

``For March we are already stepping up our efforts to help consumers get back into the market with exceptional new deals.'' DesRosiers attributed GM's weakness to an attempt to raise list prices late last year, along with a failure to offer significant incentives and its retreat from low-margin sales to rental and other fleets. ``Take these three together and they are losing significant market share, falling to below 18 per cent of the market,'' DesRosiers said. ``Ford's current market share is now up to about 15 per cent of the total market in February and congratulations are in order, but only a decade ago they sold about 21 to 22 per cent of vehicles in Canada.''

Overall, he observed, ``the downturn in new vehicle sales is affecting almost every one of the OEMs bar Mercedes, Audi, Subaru, Suzuki, Kia and Hyundai.'' He expects GM to return to the top of the sales chart but said that last month ``Canada emerged from having a dominant three OEMs (original equipment manufacturers) in GM, Ford and Chrysler to having a dominant six, yes six, OEMs which now include Toyota, Honda and Hyundai, and Mazda and Nissan are only a few thousand units behind so we may be entering an era of the Big Eight OEMs.''