The Truth About Cars » February 2014 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 18 Jul 2014 20:52:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » February 2014 Canada Sales Recap: February 2014 Mon, 17 Mar 2014 18:46:10 +0000 TTAC_Canada-auto-brand-market-share-chart


In February 2014, for the eleventh consecutive month, Canada’s auto industry generated year-over-year sales growth. The gains produced in each of the last two months aren’t significant. In fact, auto sales through the first two months of 2014 are down 1.4% compared with the January/February period in 2012.

Automakers chasing a second consecutive record year of total auto sales can’t be too concerned by the slim YOY improvement. Sales in March and April will likely be more than 60% stronger than they were in January and February. And though auto sales only rose 1.5% during the first one-sixth of 2014, a less vicious winter could have allowed more customers to enter new car stores.

The Chrysler Group’s buyers have not been deterred by harsh weather, at least not on the light truck side of the ledger. In February and on year-to-date terms, Chrysler/Dodge/Jeep/Ram/Fiat sales led all manufacturers, outselling the second-ranked Ford Motor Company by nearly 2300 units in February.

With sales that were 64% stronger than Toyota’s, the Ford brand was by far the highest-volume specific brand. Ford brand car sales are down 21% in 2014.

2668 additional sales from the Jeep Cherokee, Canada’s seventh-best-selling utility vehicle, have been a big help at Chrysler. (Excluding the Cherokee, Chrysler Group volume is down 1%. With the Cherokee, sales are up 7%.) Likewise, Chrysler finds strength in its Ram Pickup, which has seen a market share boost in the truck category to 29% from 27% at this time last year.

Car sales across the Chrysler/Dodge/Fiat range are down 10% in 2014 and fell 22% in February. Only 12% of the vehicles sold by the Chrysler Group in February were passenger cars.

Though it’s exacerbated in Chrysler’s showrooms, Canada’s distaste for cars is becoming more obvious. Automotive News says 39.2% of the new vehicles sold in Canada last month were passenger cars, way down from 43.9% in February 2013 and 44.3% in February 2012. February’s top-selling car, the Hyundai Elantra – which trails the Honda Civic through two months – was down 6%. Sales of the Mazda 3, Volkswagen Jetta, Chevrolet Cruze, Ford Focus, Hyundai Accent, Ford Fusion, and Honda Accord, which ranked fourth through tenth among cars in February, were down YOY.

Meanwhile, massive increases were reported by many of Canada’s top-selling small crossovers. The Ford Escape, Honda CR-V, Nissan Rogue, Chevrolet Equinox, Mazda CX-5, Hyundai Tucson, and Subaru Forester averaged year-over-year gains of 47%.

BMW was the top-selling premium brand in Canada in February, though not year-to-date. Lexus is far from being the Canadian luxury leader, but Toyota’s premium division has outsold Acura in 2014, no mean feat for Lexus. Acura has outsold Lexus by an average of nearly 2300 units annually over the last five years. Typically, Lexus’s car division simply doesn’t pull its fair share of the weight. In fact, at both brands, as is the case among numerous premium automakers, utility vehicles carry the load. 59% of Lexus’s February volume was RX/LX/GX-derived (compared with 40% in the U.S.) while Acura generated 67% of its February Canadian sales with the MDX and RDX.

However, it’s the BMW X5 and not the Lexus RX which currently leads all premium brand crossovers. Indeed, the X5 has led premium utility sales in three of the last four months, a meaningful achievement for a vehicle that’s priced in excess of $63,000 when vehicles like the second-ranked Audi Q5 start just above $40K.

So-called premium automobiles form a burgeoning part of the Canadian market, a part of the market that’s being fuelled as much by high riders as it is by entry-level luxury cars. That should come as no surprise in a country where seven dozen SUV/CUV nameplates have produced 34% of the new vehicle sales in 2014.

On the other hand, maybe Canadian consumers are setting the stage for a return to tradition. Minivan sales jumped 17% to 6671 units in February, equal to 6.3% of the industry’s total volume, almost twice the market share achieved by minivans in the U.S. Or maybe not.

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Tax Refunds, Easy Credit Boost Used Car Prices Mon, 10 Mar 2014 13:42:53 +0000 145640_cars_KJH_

A combination of income tax refunds issued in January and February with accessible financing have boosted used-car prices overall in the first two months of 2014.

Automotive News reports prices rose 1.1 percent year to date, and 0.8 percent over the past month, according to the Manheim Used Vehicle Value Index. Meanwhile, the IRS processed 40.4 million returns in the first two months of the year, refunding $125.8 billion to taxpayers at an average of $3,112, which helped in propping up wholesale used vehicle prices.

Easy credit with attractive terms also aided used-vehicle pricing, making the market “more profitable than the underlying unit sale numbers would suggest” according to Manheim.

Overall sales fell 1 percent from the previous year, and 12 percent from January to 2.05 million units, with used compact cars falling the hardest at 3 percent from last year due to heavy supply and competition from newer vehicles. Used truck sales rose 8 percent in the same period due to high demand and low inventories.

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Presidents Day, Warmer Weather Provide Small Jump In February Sales Wed, 26 Feb 2014 11:00:08 +0000 Mazda-Dealership

Brief warming spells between polar vortices and Presidents Day sales boosted sales in February, though rising inventories and incentives raise questions about sales momentum heading into the oncoming spring selling season.

Automotive News reports seasonally adjusted annualized rates of 15.4 million units from TrueCar and, and 15.3 million from Kelley Blue Book, up from 15.2 million SAAR projected last month after snowstorms and colder temperatures across most of the country kept consumers out of the showroom.

Meanwhile, fleet sales also took a hit this month, contributing to overall SAAR projections of 15.5 million from Barclays Capital, 15.7 million from LMC Automotive, and 15 million-plus from Wells Fargo Securities. Wells Fargo Securities senior analyst Richard Kwas also estimates March’s SAAR could surpass 16 million units, a figure last seen in August and November 2013, while he and J.D. Power senior vice president of the global automotive practice John Humphrey both believe the negative effects bestowed by winter weather systems earlier in February would be mitigated by stronger push in sales — boosted by Presidents Day promotions — at the close of the month.

Part of that push comes at the heels of more incentives. TrueCar listed increases of 3 percent over January, 5 percent from the same point in 2013, and a year-over-year of 20 percent for Honda, Hyundai/Kia, Toyota and Volkswagen. Ford also boosted their year-over-year to 16 percent, while General Motors and FCA’s Chrysler Group saw their incentive spending fall. Transaction prices also rose this month, with LMC predicting a record average of $29,000 per unit, beating the previous record from last February by over $400 per vehicle.

At the start of February, automakers began with an 88-day supply of inventory, the highest since 2009 when automotive sales collapsed at the start of the Great Recession. LMC expects the inventory should thin by spring — projecting a 16.2 million SAAR for 2014 — though warned production levels could drop if the backlog is still an issue come June, forecasting a 2.5 percent decline in North American production to 16.5 million units.

Even more interesting will be the month of March. It could be the first indicator of over-exuberance about the auto market, or it could be the sign of things picking up after a nasty bout of cold weather.

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