Cain's Segments: July 2013 Canada Recap

For the fourth consecutive month, Canadian auto sales increased in July 2013. An extra 10,600 units translated to a 7% increase, the second-best improvement so far this year. Passenger car volume, which travelled in the wrong direction in the first half of 2013, jumped 11% in July.

Strong performances by Canada’s three best-selling cars – Civic up 36%, Elantra up 25%, Corolla up 23% – induced the progress. The trio accounts for one in five car sales in Canada. Although the Elantra lost its lead as Canada’s best-selling car, the Hyundai is only 351 sales back of the momentum-carrying Civic with five months remaining.

BMW’s 3-Series was Canada’s 15th-best-selling car in July. After finishing the first half 1371 sales ahead of its next-best-selling rival, the 3-Series ended July with an 1820-unit lead over the Mercedes-Benz C-Class. The 3-Series and C-Class account for 36% of all BMW and Mercedes-Benz sales in Canada, a slightly higher ratio than they pull in south of the border.

Overall, however, so-called premium brands don’t perform in Canada the way they do in the U.S. On that point, most notable are Detroit’s high-end automakers. Cadillac owns 0.5% of the Canadian market; Lincoln just 0.3%. Market share afforded to Cadillac and Lincoln in their homeland totals 1.6%.

The trend is pointing in Cadillac’s favour. Sales jumped 33% in the first seven months of 2013 and more than doubled in July. Lincoln, on the other hand, is down 18% this year and fell 19% in July. Still, Cadillac generates 18% of its U.S. volume with the XTS, but XTS sales are 39 times stronger in the U.S. than in Canada, where big cars simply are simply not deemed to be desirable. Lacking the XTS’s U.S.-style impact, Cadillac is left with a very small lineup in Canada.

It’s not just big luxury brand cars like the XTS and Lincoln MKS (down 56% to just 168 YTD) that fail to attract buyers. Sales of the Chrysler 300 are down 3%. Taurus volume is down 19%. The Chevrolet Impala should pick up soon, but through July, Impala volume has been cut in half. Hyundai doesn’t sell the Azera here, but Genesis sedan sales are down 15% and Kia’s Cadenza has only managed 62 sales in its first four months. Nissan Maxima? Down 43%. Buick LaCrosse? Down 52%. Toyota Avalon sales nearly tripled, but at 839 units through seven months, it’s a rare breed. Toyota Canada sells that many Corollas every week.

No, when Canadians think big, they don’t think car. Despite the 14% year-over-year decline reported by Canada’s best-selling vehicle, the Ford F-Series, and drops at Chevrolet and GMC, pickup truck sales increased 3% in July, forming 17% of the overall market.

If the first, third, and second-ranked trucks all posted declines, not to mention the declines reported by five other continuing trucks and a couple defunct pickups, how did the truck market continue its Canadian expansion? Ram sales rose by 1373 units, a 21% year-over-year increase. Through seven months, the Ram truck range has outsold the GM full-size twins by 90 units. It still trails the Ford F-Series by a wide margin, but the Ram remains Chrysler’s catalyst.

To what end? The Chrysler Group sold more automobiles in Canada than any other manufacturer in July 2013. Ford Motor Company’s own Ford division was the leading brand, but Chrysler Canada’s five divisions outsold FoMoCo by more than 1000 units, Hyundai-Kia by nearly 5000 units, and General Motors by more than 7000 units. The Ram truck accounted for three in ten Chrysler sales. Combined, the Ram, Dodge’s Grand Caravan and Journey, and Jeep’s Wrangler and Grand Cherokee outsold General Motors by 739 units.

Through seven months, from a pure volume standpoint, Hyundai has outsold Honda. Dodge and Ram would be the second-best-selling brand if they rejoined. Declining Mazda is more than 6000 sales ahead of rising Volkswagen. BMW is 71 sales ahead of Sprinter-less Mercedes-Benz. Lexus narrowly leads Buick. Fiat is 1566 units up on Mini. And Porsche is well on its way to another record year, having already sold more vehicles than in all of 2010, which was a record year at the time.

Full table available here