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Automakers’ Canadian subsidiaries see weak December sales amid slumping economy
Tuesday, 6 January 2009 - 8:37am
All three North American automakers — General Motors, Chrysler and Ford — saw their share of the Canadian vehicle market shrink in 2008.
““I don’t care how much money the governments in North America provide to Detroit,” industry analyst Dennis DesRosiers said in a report Monday.
“Until they can turn their market share losses around they will continue to be in trouble ... to be losing market share in a declining market is a disaster scenario.”
Bill Pochiluk, president of industry adviser AutomotiveCompass LLC, said the slump could continue for years as consumer perception of the Detroit Three’s brands has been battered by GM and Chrysler’s pleas for emergency loans to stave off bankruptcy.
This could hurt their sales numbers through 2014, resulting in declining vehicle production and thousands more job losses, he said.
GM, Ford and Chrysler have already cut several thousand jobs, with GM planning to shut down a truck plant in Oshawa this spring, costing 2,600 jobs, and a Windsor transmission factory next year, affecting 1,400 jobs.
“There is now growing market research that shows that the way governments have been throwing GM, Ford and Chrysler under the bus, that they are damaging the brands of these guys,” Pochiluk said.
He said the effects of this brand damage could be felt long after the current recession has run its course, and predicted a reduction in sales of North American-produced vehicles of between three and five per cent — or 800,000 vehicles — between 2012 and 2014.
“If the disparaging of the Detroit Three continues to the point where consumers lose confidence on a more permanent basis, we’ve estimated that the labour impacts could be something in the order of two to three plant equivalents, which would translate into job declines in the order of 10,000 to 20,000 people,” Pochiluk added.
GM, Ford and Chrysler plan to restructure their North American businesses and are paying their bills with the help of government aid, hoping to stay afloat until the market recovers.
Data released Monday indicates that last month was the worst December for Canadian car and truck sales in 12 years, with automakers reporting an average 21 per cent decline year over year.
“Canada has finally seen the serious sales declines which have prevailed in the U.S. for some months now,” said DesRosiers.
“One can safely say that Canada too is in an automotive recession.”
On Monday, Chrysler Canada reported it sold 12,294 vehicles in December, down a whopping 35.7 per cent from a year earlier. General Motors Canada reported a year-over-year sales decrease of 19.5 per cent to 21,000 vehicles. DesRosiers reported Ford sales were down 5.5 per cent to 14,273.
The Japanese automakers’ sales figures were also battered. Honda Canada’s December sales tumbled 41 per cent to 10,555, while Toyota Canada’s December sales were 9,572, down 35 per cent year-over-year.
For the full year, the Detroit Three’s Canadian sales declined by 7.9 per cent to 787,378 vehicles, while foreign automakers’ sales rose 6.3 per cent to 848,608.
“There was carnage from one end of the industry to the other,” DesRosiers said, adding that declining employment and economic uncertainty are to blame for the weak sales numbers.
He predicted the decline in Canadian vehicle sales would continue throughout 2009, and forecast a full-year decline of nine per cent, or approximately 1.5 million vehicles.
Declines in U.S. December vehicle sales were similar to those in Canada. Toyota saw a 37 per cent decline while Honda’s sales dropped 35 per cent, Ford Motor Co.’s sales were down 32 per cent, General Motors Corp.’s fell 31 per cent, and Chrysler LLC’s dropped 53 per cent.
By Kristine Owram THE CANADIAN PRESS
TORONTO — Less than half the vehicles sold in Canada in 2008 were produced by the Detroit Three automakers — a first for the struggling North American auto industry as bleak December sales data capped off a dismal year.
Foreign automakers sold 51.2 per cent of vehicles in Canada last year, the first time that the market share of the Detroit Three has fallen below 50 per cent.
““I don’t care how much money the governments in North America provide to Detroit,” industry analyst Dennis DesRosiers said in a report Monday.
“Until they can turn their market share losses around they will continue to be in trouble ... to be losing market share in a declining market is a disaster scenario.”
Bill Pochiluk, president of industry adviser AutomotiveCompass LLC, said the slump could continue for years as consumer perception of the Detroit Three’s brands has been battered by GM and Chrysler’s pleas for emergency loans to stave off bankruptcy.
This could hurt their sales numbers through 2014, resulting in declining vehicle production and thousands more job losses, he said.
GM, Ford and Chrysler have already cut several thousand jobs, with GM planning to shut down a truck plant in Oshawa this spring, costing 2,600 jobs, and a Windsor transmission factory next year, affecting 1,400 jobs.
“There is now growing market research that shows that the way governments have been throwing GM, Ford and Chrysler under the bus, that they are damaging the brands of these guys,” Pochiluk said.
He said the effects of this brand damage could be felt long after the current recession has run its course, and predicted a reduction in sales of North American-produced vehicles of between three and five per cent — or 800,000 vehicles — between 2012 and 2014.
“If the disparaging of the Detroit Three continues to the point where consumers lose confidence on a more permanent basis, we’ve estimated that the labour impacts could be something in the order of two to three plant equivalents, which would translate into job declines in the order of 10,000 to 20,000 people,” Pochiluk added.
GM, Ford and Chrysler plan to restructure their North American businesses and are paying their bills with the help of government aid, hoping to stay afloat until the market recovers.
Data released Monday indicates that last month was the worst December for Canadian car and truck sales in 12 years, with automakers reporting an average 21 per cent decline year over year.
“Canada has finally seen the serious sales declines which have prevailed in the U.S. for some months now,” said DesRosiers.
“One can safely say that Canada too is in an automotive recession.”
On Monday, Chrysler Canada reported it sold 12,294 vehicles in December, down a whopping 35.7 per cent from a year earlier. General Motors Canada reported a year-over-year sales decrease of 19.5 per cent to 21,000 vehicles. DesRosiers reported Ford sales were down 5.5 per cent to 14,273.
The Japanese automakers’ sales figures were also battered. Honda Canada’s December sales tumbled 41 per cent to 10,555, while Toyota Canada’s December sales were 9,572, down 35 per cent year-over-year.
For the full year, the Detroit Three’s Canadian sales declined by 7.9 per cent to 787,378 vehicles, while foreign automakers’ sales rose 6.3 per cent to 848,608.
“There was carnage from one end of the industry to the other,” DesRosiers said, adding that declining employment and economic uncertainty are to blame for the weak sales numbers.
He predicted the decline in Canadian vehicle sales would continue throughout 2009, and forecast a full-year decline of nine per cent, or approximately 1.5 million vehicles.
Declines in U.S. December vehicle sales were similar to those in Canada. Toyota saw a 37 per cent decline while Honda’s sales dropped 35 per cent, Ford Motor Co.’s sales were down 32 per cent, General Motors Corp.’s fell 31 per cent, and Chrysler LLC’s dropped 53 per cent.
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