Ford, Chrysler left behind as small cars rule
GREG KEENAN
Globe and Mail Update
Companies with hot-selling small cars joined BMW Canada Inc. in jumping ahead of the pack in a flat Canadian vehicle market last month.
There was more bad news in Detroit where Ford Motor Co. and the Chrysler Group posted sales declines and lost more ground to market leader General Motors Corp., which had a surprising sales gain.
Nonetheless, GM announced it will cut North American vehicle production by 5 per cent in the second quarter. Ford will slash output by 14 per cent in the same period.
Over all, sales in the U.S. market were also flat from year-earlier levels.
Canadians drove off dealers' lots in 97,248 new cars and trucks, compared with 97,594 in February, 2006.
Small cars did well as gas prices edged up from low levels in January, particularly late in the month in Toronto, where some stations ran out of gas last week.
Sales of the subcompact Versa helped propel Nissan Canada Inc. to the best performance of the month among the major companies with a 31-per-cent sales gain. Nissan sold 1,101 Versa models in February and is averaging sales of about 1,000 of the cars monthly.
The Versa competes with the Yaris from Toyota Canada Inc. That car helped pull Toyota to a record February performance.
It was a similar story at Mazda Canada Inc., where sales of the Mazda3 compact jumped 13 per cent, helping Mazda to its ninth straight monthly record.
BMW posted a 22-per-cent jump.
The big gains among new subcompacts follow the traditional pattern of the Canadian market, which is dominated by subcompacts and compacts and other entry-level vehicles.
For the first time ever, 50.7 per cent of retail purchases last year were more fuel-efficient vehicles, industry analyst Dennis DesRosiers said in an analysis of the market.
“The market is working just fine and consumers are embracing smaller, fuel-efficient vehicles in a very big way,” said Mr. DesRosiers, president of DesRosiers Automotive Consultants Inc. “Why not just let the market continue to work?” he asked in a jab at the federal government, which is proposing to regulate fuel economy as a means of reducing greenhouse gas emissions.
Many of those driving larger vehicles are doing it because they have no choice, he noted.
“Tell a soccer mom to buy a new Toyota Yaris instead of a new Toyota Sienna minivan and they will tell you to take a hike.”
Hybrid vehicles that combine electric motors with a traditional internal combustion engine are getting a lot of hype, but that is overblown, added Richard Cooper, executive director of the Canadian operations of consulting firm J.D. Power and Associates.
“When it comes down to it, we buy small, fuel-efficient vehicles anyway,” Mr. Cooper pointed out.
Companies that don't have a new subcompact didn't fare as well last month. Sales for Ford Motor Co. of Canada Ltd., which has no subcompact at all, slumped 11 per cent last month.
“Ford, I think, is really suffering from the lack of a small, fuel-efficient vehicle, especially in this market,” Mr. Cooper said.
GM, whose Chevrolet Aveo and Pontiac Wave subcompacts, are among the older cars in the segment, posted a 7-per-cent sales decline.
DaimlerChrysler Canada Inc., which, like Ford, doesn't have a subcompact, managed to hold its position with flat sales.
