Prafull Koli
05-06-2003, 09:40 AM
Offshore auto makers bite into Big Three share
By*GREG KEENAN (globeinvestor.com)
AUTO INDUSTRY REPORTER; With files from AP
Friday, May 2, 2003 - Page B1
Toyota Canada Inc. sold more passenger cars in Canada last month than DaimlerChrysler Canada Inc. and Ford Motor Co. of Canada Ltd. combined as offshore-based manufacturers grabbed more market share away from the Big Three auto makers.
Vehicle sales fell 9.2 per cent in Canada last month to 150,009 from 165,270, as the war in Iraq and worries about severe acute respiratory syndrome in Toronto appeared to weigh on consumers.
"Consumers faced a lot of uncertainty in April -- war, the SARS outbreak, even the weather was volatile," Bob Girard, vice-president of sales for Ford Canada.
Not all auto makers in Canada were affected, however, as sales at DaimlerChrysler Canada, Ford Canada and General Motors of Canada Ltd. fell by double-digit percentages. DaimlerChrysler sales slid 15 per cent, Ford reported an 18-per-cent decline and GM's sales tumbled 16 per cent.
Nissan Canada Inc., on the other hand, racked up the best sales month in its history.
Toyota Canada posted record April sales and its passenger car sales of 12,228 exceeded those of DaimlerChrysler and Ford, which together totalled 11,748.
"This is shocking -- the market share losses by the Big Three," said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ont.
The Big Three's market share slumped to 57.2 per cent last month from 61.5 per cent a year earlier.
Each percentage point of market share represents 17,000 vehicles, based on annual sales of 1.7 million cars, trucks, sport utility vehicles and minivans in Canada.
GM Canada's market share has tumbled below the 30-per-cent level that the auto maker set as a key goal in 2002 -- a goal it surpassed. GM Canada's share was 28 per cent last month, compared with 30.3 per cent in April, 2002.
One GM Canada dealer said the auto maker has been hurt by the rise in the Canadian dollar.
There was a good-sized market for GM in selling four-wheel-drive trucks and SUVs to some buyers who would then turn around and sell them within 12 months to U.S. buyers, one dealer said.
But that market has dwindled because the drop in the dollar means Canadians are receiving only $30,000 for those used vehicles this year, compared with $35,000 last year.
Used car prices in Canada have fallen by a fraction in the past year, Bank of Nova Scotia economist Carlos Gomes said this week, compared with double-digit increases in 2001. Even as its sales fell last month, GM Canada raised prices effective yesterday for the third time since the 2003 model year began last summer.
GM Canada spokesman Stew Low said the total increase for the model year amounts to 1.3 per cent, but final transaction prices for the auto maker have fallen because of consumer incentives in the fiercely competitive market.
Results in the U.S. market were similar, despite even heavier incentives there than in Canada last month, particularly on the part of the Big Three.
By*GREG KEENAN (globeinvestor.com)
AUTO INDUSTRY REPORTER; With files from AP
Friday, May 2, 2003 - Page B1
Toyota Canada Inc. sold more passenger cars in Canada last month than DaimlerChrysler Canada Inc. and Ford Motor Co. of Canada Ltd. combined as offshore-based manufacturers grabbed more market share away from the Big Three auto makers.
Vehicle sales fell 9.2 per cent in Canada last month to 150,009 from 165,270, as the war in Iraq and worries about severe acute respiratory syndrome in Toronto appeared to weigh on consumers.
"Consumers faced a lot of uncertainty in April -- war, the SARS outbreak, even the weather was volatile," Bob Girard, vice-president of sales for Ford Canada.
Not all auto makers in Canada were affected, however, as sales at DaimlerChrysler Canada, Ford Canada and General Motors of Canada Ltd. fell by double-digit percentages. DaimlerChrysler sales slid 15 per cent, Ford reported an 18-per-cent decline and GM's sales tumbled 16 per cent.
Nissan Canada Inc., on the other hand, racked up the best sales month in its history.
Toyota Canada posted record April sales and its passenger car sales of 12,228 exceeded those of DaimlerChrysler and Ford, which together totalled 11,748.
"This is shocking -- the market share losses by the Big Three," said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ont.
The Big Three's market share slumped to 57.2 per cent last month from 61.5 per cent a year earlier.
Each percentage point of market share represents 17,000 vehicles, based on annual sales of 1.7 million cars, trucks, sport utility vehicles and minivans in Canada.
GM Canada's market share has tumbled below the 30-per-cent level that the auto maker set as a key goal in 2002 -- a goal it surpassed. GM Canada's share was 28 per cent last month, compared with 30.3 per cent in April, 2002.
One GM Canada dealer said the auto maker has been hurt by the rise in the Canadian dollar.
There was a good-sized market for GM in selling four-wheel-drive trucks and SUVs to some buyers who would then turn around and sell them within 12 months to U.S. buyers, one dealer said.
But that market has dwindled because the drop in the dollar means Canadians are receiving only $30,000 for those used vehicles this year, compared with $35,000 last year.
Used car prices in Canada have fallen by a fraction in the past year, Bank of Nova Scotia economist Carlos Gomes said this week, compared with double-digit increases in 2001. Even as its sales fell last month, GM Canada raised prices effective yesterday for the third time since the 2003 model year began last summer.
GM Canada spokesman Stew Low said the total increase for the model year amounts to 1.3 per cent, but final transaction prices for the auto maker have fallen because of consumer incentives in the fiercely competitive market.
Results in the U.S. market were similar, despite even heavier incentives there than in Canada last month, particularly on the part of the Big Three.