Auto sales slow in July

Canadian vehicle sales in July dropped 4.9 per cent from the same month a year ago, according to a firm that tracks automotive sales.

Sales of cars and light trucks fell to 141,472 last month, DesRosiers Automotive Consultants said Wednesday. That figure represents a drop of more than 7,000 from the 148,756 vehicles sold in July 2010.

A lack of discounts and continuing shortages of Japanese cars, along with higher fuel prices and an uncertain economy, kept many buyers away.

DesRosiers said car sales were down 6.1 per cent last month at 63,379 units from 67,532 a year ago, while truck sales fell 3.9 per cent to 78,093 from 81,224.

"Light vehicle sales were down by 4.9 per cent for the month with a very mixed bag of performance at the individual (automaker) level," Dennis DesRosiers said in the report.

Both Chrysler and Ford's Canadian subsidiaries reported strong sales.

Chrysler sold 23,385 cars and light trucks, up five per cent from the same month a year earlier. It was the best July for sales in Chrysler Canada's history.

Ford remained Canada's best-selling automaker, with sales of 27,344 cars and light trucks. That was its best sales showing in 32 years and represented a one per cent increase over July last year.

Ford's car sales were up 10 per cent, driven by strong interest in its Fiesta, Fusion and Taurus models.

Ford truck sales fall

But truck sales fell three per cent, as customers moved from trucks to cars, partly because of higher gas prices.

So far this year, car sales are 23 per cent higher than they were at the same time last year, while truck sales are down 0.5 per cent.

"Ford was up very slightly (over) last year and although saw little growth still outperformed the market by almost a 90 basis points," DesRosiers said.

Chrysler also reported a big boost in car sales, which grew 33 per cent from last July, adding that truck sales were also strong at 19,614, up 0.7 per cent.

"July was a remarkable month for Chrysler and it shows in our results," said Reid Bigland, president and CEO of Chrysler Canada.

"We announced a Q2 adjusted net profit of $181 million, a 30 per cent increase in revenues to $13.7 billion and now our strongest July sales in the 86-year history of Chrysler Canada," he said.

Year-to-date, Chrysler Canada sales are up 13 per cent at 145,000 units compared with 127,793 in the same period last year.

Ford Canada sales are up five per cent, with 167,721 vehicles sold this year, compared with 159,965 sold in the same year-ago period.

GM, Toyota sales fall

GM Canada, however, saw July sales fall 14 per cent to 20,345 vehicles from 23,917 a year ago.

The company said its July sales were slower than expected, but added it remains on track for a solid 2011 performance as sales of its most popular brands, like the Chevrolet Cruze and Buick Regal, remained strong.

"Demand for our most popular vehicles continues to rise, but sales felt some impact from product mix and inventory levels of high-volume models," said Marc Comeau, vice-president of sales, service and marketing at GM Canada.

Toyota Canada's sales fell 18.2 per cent year-over-year, with sales of Toyota, Lexus and Scion cars, trucks and SUVs totalling 12,167 as it recovered from parts supply disruptions caused by the earthquake and tsunami in Japan in March.

But the company said that recovery is picking up strength. It said its sales increased 6.1 per cent from June against what it said was an estimated 14.2 per cent decline in the total Canadian market over that same period.

"With the return to 100 per cent production for most North American built vehicles, Toyota's sales momentum has been increasing for the past two months," said Tony Wearing, Toyota Canada's managing director.

Most fellow Japanese automakers saw similar declines, with Honda sales down 24.8 per cent, Nissan sales down 7.6 per cent and Suzuki sales dropping 51 per cent.

Slight rebound predicted

But DesRosiers said those automakers should see a slight rebound in the second half of the year.

"We suspect that as the Japanese fill their supply lines, this will offset some of the negative economic indicators developing for the second half of the year," he said.

DesRosiers said brands such as Audi, BMW, Hyundai, Kia, and Volkswagen, which largely focus on fuel efficiency and have been growing in popularity among Canadian consumers, all reported double-digit growth.

Subaru Canada reported sales of 16,093, a gain of 2.6 per cent from a year earlier, while Hyundai Auto Canada announced sales of 12,753 units, a 10.9 per cent increase.

Kia Canada Inc. also recorded its best-ever month in July with 6,383 new vehicles sold, up 12.9 per cent compared to July 2010.  

Volkswagen Canada's sales of 4,522 represented a 17 per cent rise.

BMW Group Canada reported a sales boost of 14.1 per cent to 2,867 units sold this July, while fellow luxury carmaker Audi's sales grew 14.2 per cent.

DesRosiers warned if automakers can't find money to offer better purchase incentives, the second half of the year could be weak. He forecast the auto market will improve by a slight 0.7 per cent this year, but added that so far, it is tracking slightly ahead of that estimate.

"We're going to hold our forecast for now since there is so much uncertainty out there and more downside threat than upside opportunity," he said.