Canadian auto sales jump 15 per cent in January

TORONTO - Automakers saw strong Canadian sales in the opening month of 2012 with many reporting double-digit growth from a year ago and some setting January sales records.

Overall sales grew 15.4 per cent to 97,497 vehicles last month, according to data released Wednesday from the Association of International Automobile Manufacturers of Canada.

Sales have been boosted by persistently low interest rates, buyers searching for better fuel efficiency, and those looking to replace older vehicles as the average vehicle age on Canadian roads climbs.

"January light vehicle sales in Canada surprised everyone including myself,'' said Dennis DesRosiers of DesRosiers automotive consultants.

"Sales have been anemic for about 4 years and this is an excellent start to the year ...January sets us up for some positive surprises through the rest of the year.''

DesRosiers believes the surprising boost was driven by pent- up demand for foreign nameplates _ at the expense of General Motors and Ford.

Chrysler Canada, which has been one of the fastest growing brands, had its best January in a decade, Ford lost its spot as Canada's top seller but continued to gain traction, and Toyota sales jumped as supply caught up to demand.

One sour spot was at General Motors, where sales dropped 10 per cent.

Chrysler Canada's sales in January jumped 22 per cent from a year before, helping it to wrest the title of Canada's best-selling automaker from Ford, which fell to the No. 2 spot.

Chrysler said it sold 16,584 vehicles last month, besting the 13,587 sold in the year-earlier period and enough to make it Chrysler's best January since 2002.

"We have been the fastest growing automaker in Canada for the past two years and it is great to start 2012 as the highest selling vehicle company in Canada,'' said Dave Buckingham, Chrysler Canada's chief operating officer.

Chrysler reported January sales in both Canada and the U.S. on the same day it announced that 2011 was its first profitable year since 1997. The company, now controlled by Italian automaker Fiat, was forced to seek bankruptcy protection and a government bailout in 2009 due to a severe market downturn.

Ford Canada sales also grew, by five per cent, to 14,978 vehicles, compared with 14,324 in January 2011.

Last year's best-selling automaker made no comment about Chrysler usurping that title last month and instead focused on positive momentum in January.

"We are off to a great start in the new year with strong car sales,'' said Dianne Craig, president and CEO at Ford of Canada.

However General Motors, which has been struggling lately with declining sales, saw a 10.9 per cent drop to 12,959 vehicles sold in January.

The company that was Canada's top auto seller for decades, hasn't fully recovered after restructuring under bankruptcy protection three years ago. It finished third in January, with marketshare coming below its 15 per cent target.

"Now that the Japanese are coming back strong GM may be the target so further loses in market share may be in the works,'' DesRosiers said.

Sales of the major brands from outside North America were up 26 per cent to 53,082 last month, said the association representing foreign automakers.

"Improving consumer confidence levels as well as some improving economic indicators have contributed to the vehicle sales market starting off the year on the right foot,'' said David Adams, president of the AIAMC.

"For AIAMC members, the fact that the negative consequences of natural disasters last year are largely behind us as well as the fact that companies are bringing a number of new and exciting models to the Canadian market this year has contributed to early sales success, which should bode well for our members' overall sales this year,'' said Adams.

Japanese automakers, which have struggled with supply issues since the Japanese earthquake and tsunami last March, indicated that sales levels may be returning to normal.

Honda Canada reported a whopping 127 per cent increase over last January's sales, with a total of 9,168 Honda and Acura vehicles sold.

Sales of its popular Honda Civic _ which had been in short supply after a parts shortage caused by the disasters _ rose 333 per cent on the back of a recent ramp-up in production.

Toyota Canada saw an 18 per cent increase in sales from a year earlier. It said last month was its best-ever January, with 9,850 vehicles sold.

Foreign automakers captured a greater share of the market this January _ 54.4 per cent compared with 49.8 per cent last year.

Among the highlights from other foreign-made brands, Hyundai sales grew 11.6 per cent, BMW sales were up 34.4 per cent, Nissan sales rose 23.4 per cent, Volkswagen sales grew 8.7 per cent and Kia had a record January with 23.8 per cent growth.

The AIAMC said Canadian car sales grew by 29 per cent, outpacing the seven per cent growth seen in the truck segment, which still outsold the car sector on a total volume basis.

The January sales data suggests industry sales continued to gain momentum after three previous months of growing sales.

A recent report from Scotiabank indicated that January sales put the industry on track to grind slowly above 1.6 million units in 2012 for the first time since the recession, a one per cent increase from the 1.59 million vehicles sold last year. The 2011 total represented a two per cent increase from the year before.

Generally, analysts expect about the same level of sales in 2012 compared with last 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, Chrysler reported Wednesday that January sales in the U.S. jumped 44 per cent year over year, while Ford's rose seven per cent. However, General Motors suffered a six per cent decline, saying demand for its trucks and crossovers fell when compared with strong sales a year ago.