Auto sales weak in first half
Market noticeably softer despite continued incentives
June's 2.1% gain `misleading' after weak month in 2003


TONY VAN ALPHEN
BUSINESS REPORTER

Canada's auto market sputtered for most of the first half of the year despite continuing high- octane incentives.

Business improved in June but it couldn't make up for big losses in earlier months, figures from auto makers showed yesterday.

Sales and leases of new, light vehicles fell 3.9 per cent to 790,909 in the first six months in comparison with the same 2003 period.

In June, showroom business climbed 2.1 per cent to 150,432 from the same month last year, according to the manufacturers' figures.

It marked only the second time in the last 10 months that sales have increased from the comparable period in the previous year.

"Blah is the only word that can describe the market this year," said industry watcher Dennis DesRosiers.

He said the improvement in June is somewhat misleading since its comparison, June, 2003, was a weak month.

Sales have steadily declined since August, 2003, in a year when over-all volume dropped for the first time since 1995.

DesRosiers, who runs DesRosiers Automotive Consultants, said the auto makers have offered the highest incentives in the industry's history this year, but they have not noticeably spurred the market. In three of the six months, the market has suffered double-digit losses.

"The vehicle companies appear to be playing chicken with each other," he added. "They're saying `match my incentives or else.'"

Industry leader General Motors of Canada Ltd. posted a gain of 1.6 per cent to 227,319 vehicles, including heavy-duty trucks, in the first six months.

Its sales increased 6.9 per cent to 36,366 in June. The auto giant attributed the improvement to strong pickup and small-car sales.

GM, which is offering no-interest financing on most models, recently re-introduced its popular "ring and win" contest, where customers can get between $1,000 and $10,000 or even a free vehicle by making a phone call.

Business at Ford Motor Co. of Canada tumbled 12 per cent to 117,632 in the first half. In June, sales dropped 7.6 per cent to 26,075 despite strong pick-up truck deliveries.

DaimlerChrysler Canada Inc. had a small decline of 1 per cent to 115,452 in the first six months. But in June, sales jumped 8.3 per cent to 24,251, partly on the strength of booming minivan sales.

Toyota Canada Inc. sales, including luxury Lexus models, inched up 0.6 per cent to 85,748. Sales climbed 7 per cent to 16,441 in June.

Sales at Honda Canada Inc., including Acura luxury vehicles, slid 13 per cent to 67,734 in the first half. However, sales climbed 6.7 per cent to 14,105 in June as the company became more aggressive in offering incentives on the Civic, the country's best-selling car.

Fuelled by the popularity of the Mazda 3 model, Mazda Canada reported that sales soared 23.6 per cent to 41,167 in the first half. That performance continued in June as sales jumped 21.9 per cent to 7,045.

Sales at Nissan Canada Inc., including Infiniti luxury vehicles, dipped 3.4 per cent to 33,825 in the first six months. However, they improved 2.4 per cent in June to 6,139.

BMW Group Canada, including Mini cars, said its sales rose 5.9 per cent to a record 8,456 during the first half. In June, the company had the best sales month in its history as deliveries shot up 23.7 per cent to 2,115.

Subaru Canada's sales increased 1.5 per cent to 7,660 during the first six months and advanced 4.4 per cent to 1,404 last month.

Meanwhile, sales at Kia Canada fell almost 20 per cent to 12,579 in the half. June sales for Kia declined 12 per cent to 2,651.

Sales at Volkswagen Canada dropped 24.4 per cent in the first six months to 14,465. Business fell 2.5 per cent to 3,412 in June.

Mitsubishi Motor Sales of Canada posted the steepest declines. Sales plunged 25.6 per cent to 6,044 in the first half and 45 per cent last month to 949.