Cain's Segments, Canada Recap

Booming utility vehicle sales have boosted Canada’s new vehicle market to unseen highs in the first half of 2014. Despite falling car sales and a slight decline in overall pickup truck volume, Canada’s auto industry is up nearly 3% through the first six months of 2014, an increase of some 25,000 units compared with the first half of 2013.

Canada’s top-selling utility, the Ford Escape, sells at least 50% more often than any of the next-best-selling SUVs or crossovers. The Escape and all its next-best-selling cohorts combined to generate 32.3% of the Canadian market’s first-half volume, an impressive leap from 29.6% just one year earlier. Excluding SUVs and crossovers, Canada’s auto industry would be down 1.2% this year, losing more than 7000 units, rather than up 2.8% as it is with those vehicles included in the equation.

Yet the story in the month of June, specifically, was quite a bit different. Sales of utility vehicles still increased, but by a much smaller margin, rising just 2% after year-to-date sales had jumped 15% through May. And while passenger car sales declined in December, January, February, March, April, and May, June car volume jumped by more than 3%.

Volvo, Mitsubishi, Nissan, Cadillac, Porsche, BMW, Lexus, Honda, and Audi reported the most significant percentage increases in car sales.

All was not sunshine and roses in June, certainly not in the passenger car market; certainly not for General Motors. Chrysler Canada says their overall car volume slid 27%. Lincoln car sales slid 44%. Acura’s cars were down 42%.

At General Motors, where Buick car sales fell 22% and Chevrolet cars were down 13%, total passenger car volume fell 12% and total GM Canada sales were down 15%.

Hyundai and Kia combined to outsell GM for the first time since September of last year, and this during a month in which Hyundai-Kia sales decreased 6%. Pickup truck sales at GM were down 17% in June. Particularly notable declines were reported by the Spark (-76%), Traverse (-48%), Equinox (-40%), Orlando (-39%), Enclave (-37%), LaCrosse (-36%), Suburban (-36%), Trax (-35%), Impala (-32%), and Acadia (-31%).

Is this downturn an omen for what we will soon see from General Motors in its home market, or just a one-month anomaly for a company that’s down only 2% through the first half of the year? June was certainly a bad month for GM in Canada, as sales travelled very far in the exact opposite direction from where the overall industry was headed. Industry-wide new vehicle sales climbed 2%, but if we ignore the losses at GM and exclude the automaker from the calculation, auto sales were up more than 5% last month.

First half notes: The Honda Civic is halfway to ending its 17th consecutive year as Canada’s best-selling car. Chrysler Canada’s minivan production has seen the Dodge Grand Caravan (Canada’s fifth-best-selling vehicle) and Chrysler Town & Country increase their market share in the category. Canada’s full-size pickup truck market has grown slightly as Ram’s pickup range has filled the void left by declining F-Series, Sierra, and Silverado sales. A 7.5% year-over-year increase has helped Mercedes-Benz to a 1060-unit lead over BMW in Canada’s premium brand sales race. Ford is easily Canada’s top-selling auto brand overall. With its five brands, the Chrysler Group (Chrysler, Dodge, Fiat, Jeep, Ram) has outsold the Ford Motor Company by 3522 units so far this year, although Ford led Chrysler in each of the second quarter’s three months.