But low SAAR is cause for concern
Based on January’s new-vehicle sales, the volatility in the Canadian market is far from over. For some brands, January set new records, while for others, sales were down dramatically.
Overall Canadian sales were up 3.6 percent from January 2009, but that was a very low baseline. They were down by 3.7 percent compared to the average sales over the past five years.
Perhaps more worrisome, the SAAR (Seasonally Adjusted Annual Rate of sales) for January was in the range of just 1.46-to1.48-million vehicles. (Carlos Gomes, senior economist at Scotiabank estimated 1.46 million; Dennis DesRosiers, president of DesRosiers Automotive Consultants, 1.48 million.)
Until December, the SAAR had been running close to 1.6 million for several months, and 2010 closed with a total of 1.557. million for the year. Annual sales of 1.461 million in 2009 were the lowest this decade so a SAAR in that range does not seem like a promising start.
“January was very weak from a historical perspective,” according to DesRosiers. Nevertheless, he says, “given the amount of incentive dollars at the end of 2010 I could argue that these sales represent a surprisingly positive start to the year.”
Incentive dollars bring vehicle sales forward and late last year a number of OEMs put huge money on vehicles in an effort to have sales booked into 2010 instead of 2011, DesRosiers explained. “Given this, we would have expected a weak January,” he says, noting that “incentive money in January was still high so many OEMs are still playing the game!”
Big winners — big losers
As was the case through much of 2010, some manufacturers made big gains in January while others suffered big losses, in terms of year-over-year sales. But they weren’t all the usual suspects.
The big winners were Porsche (+52.1%), Mitsubishi (+29.9%), Audi (+29.0 %), Kia (+26.2%), Ford (+24.0%), Volkswagen, (+22.7%), BMW (+14.6%) and Chrysler, (+14.1%).
The biggest loser was Honda (-38.9%), followed by Lexus (-23.6%), Infiniti (-22.9%), Suzuki (-20.0%), Acura (-19.8%), Nissan (-11.9%) and Mazda (-11.6%).
Toyota (including Scion), which has seen sales decline steadily since last April, improved slightly (+0.9%) over last January – although it’s market share continued to decline, dropping below 10 percent (to 9.8%). Its market share for the full year, 2010 was 10.1 percent.
Ford leads market share gains
In terms of market share, Ford made the greatest gain, increasing by 2.8 percent (to 16.9%), while Honda suffered the greatest loss, giving up 2.9 percent of share (to 4.1%).
While Ford achieved the greatest market-share gain, however, General Motors, which lost 1.0 percent of share, still regained first place in the sales race – a position Ford held throughout much of 2010 and for the full year.
The Detroit Three are now clustered within just over 1 percent of each other in terms of share (General Motors – 17.2%; Ford – 16.9%; Chrysler – 16.0%). No other manufacturer now claims more than 10 percent of the market.
Behind GM, Ford and Chrysler in the sales rankings for January were Toyota, Hyundai, Nissan, Mazda, Honda, Kia and Volkswagen in that order. Not only did Honda drop three places in the rankings but the Honda Civic lost it’s traditional top-selling-car spot to the Hyundai Elantra.
Historical comparisons
Given the volatility of the market over the past couple years, it is informative to look at current sales in terms of averages over the past five years. Relative to five-year averages for January, those manufacturers making the greatest gains were: Audi (+106.8%); Kia (+69.7%); Mitsubishi (+53.1%); Hyundai (+52.8%); Subaru (+39.8%); Volkswagen (+39.4%); Mercedes-Benz (+39.3%); and Porsche (35.2%).
Those suffering the greatest declines, excluding Saab, which was out of the market last year, were: Honda (-49.7%); Acura (-46.5%); Smart (-41.4%); General Motors (-27.5%); Suzuki (-26.3%); Infiniti (-25.1%); Jaguar (-19.6%); Volvo (-15.6%); and Mazda (-12.5%).
