Montreal, Quebec – The Automobile Protection Agency (APA) has issued its annual review of the Canadian automobile industry, and said that despite all the attention over safety recalls, the value proposition in 2010 is very good.

APA director George Iny called this a “transition year for the industry,” with carmakers racing to introduce new SUVs built on lighter car platforms that will wreak less damage on the vehicles they hit in a collision. There are some innovative smaller vehicles like the Kia Soul and Nissan Cube, with more coming, such as the Ford Fiesta and Mazda2.

The APA expressed dismay over the decline in standards for new vehicle advertising, such as Chrysler, which is now pushing 84- and 96-month loans that promise low payments, but will leave consumers owing thousands if they try to sell the car to pay off the loan early. Also more prevalent are bi-weekly and even weekly payments. “Consumers are used to budgeting with monthly payments,” Iny said. “Weekly payments make the deal look cheaper, when it may not be.”

The report found that Ford is in the best shape among the domestic carmakers, with Canadian sales likely to increase with the arrival of the subcompact Fiesta this year and a new Focus next year. GM has appealing products, but quality issues linger on several models, while Chrysler is in a holding pattern, with lacklustre small cars and most changes a year or two away.

Canada is an exception to the weak market for luxury vehicles in most western economies, with BMW, Mercedes-Benz and Audi breaking records. The APA said the competition is so intense that it’s possible to lease an entry-level car from a German automaker for similar or less money than a loaded Japanese intermediate.

Volkswagen is now off APA’s list of vehicles to avoid, as its reliability has improved to average or better for several models, and most VW products rate at the top of their class for performance, finish and safety. All new Hyundai and Kia products offer superior value, and several redesigned Hyundai models have generated fewer complaints recently than their Japanese rivals.

The APA continues to recommend most Toyota models, saying that the automaker’s quality has slipped a bit recently and launches of some redesigned models such as the 2007 Camry and 2009 Corolla were not trouble-free, but Toyotas continue to offer superior reliability and low operating costs, and while resale values have slipped a bit, they continue to be significantly better than average. The APA believes the two most frequent causes for the unintended acceleration are interference between the pedal and floor mat, because of an incompatibility between the accelerator pedal on certain vehicles and floor mats installed by owners for winter, and pedal misapplication.

The APA said that Toyota’s conduct during the acceleration investigation has exposed weaknesses in the way Canada investigates safety defects. The APA is recommending that dealers should be required to log complaints about potential safety defects reported by their customers and file them with Transport Canada, and that automakers must have field engineers on staff or contract to investigate reports of safety defects. Canadian law requires automakers to notify Transport Canada when they become aware of a safety defect, but the APA says the language in the Motor Vehicle Safety Act may need to be reviewed to determine if it requires cooperation with the government during an investigation. Transport Canada also needs more resources for its small defect investigations department.

Connect with