Canadian auto sales speed ahead

The roaring Canadian vehicle market surged ahead again last month with an 8-per-cent jump that carried sales to the best June on record.

Canadians parked 169,528 new cars and trucks in their driveways last month – the second successive monthly record and a healthy gain on the 157,222 sales made in June, 2006.

Industry executives and analysts pointed to the booming oil patch, which is helping to offset a weaker economy in other parts of the country such as Quebec and Ontario.

“It's the growth in Western Canada that's the main driver,” said Carlos Gomes, an economist with Bank of Nova Scotia, who also pointed to the federal government's rebates on fuel-efficient cars and a matching program from Honda Canada Inc. as encouraging sales.

“We've also got pretty strong job growth in Canada,” said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ont. “If you have a job you need a car and if you have a job you can afford a car.”

Mr. DesRosiers also credited the strength in Western Canada, noting that sales jumped by more than 20 per cent in a dozen cities in the western provinces.

Strong performances by DaimlerChrysler Canada Inc. and several offshore-based companies propelled the market in June, which came after an even stronger May that was the best month on record for sales in Canada.

Several manufacturers set records, including BMW Canada Inc., Mazda Canada Inc., Mercedes-Benz Canada Inc. and Toyota Canada Inc.

Chrysler Group was the only company among the Detroit Three to outperform the market in June, posting a 24-per-cent increase from year-earlier levels.

Double-digit increases were commonplace, with two of the exceptions being Ford Motor Co. of Canada Ltd., with a 1-per-cent rise, and General Motors of Canada Ltd., whose sales fell 6 per cent.

The decline at GM in June is part of a continuing strategy of reducing sales to rental companies, Marc Comeau, vice-president of sales and marketing, said Wednesday.

Ford and Chrysler Group stepped up the pace of incentives Wednesday by introducing employee or family pricing discounts, but GM has no plans to follow suit.

“We're not overly concerned by it,” Mr. Comeau said in an interview.

“We just don't want to go back to on-again, off-again incentives,” he said.

Mr. Gomes said the seasonally adjusted annual selling rate in Canada has topped the 1.7 million level for three consecutive months, compared with 1.62 million during the first quarter.

Both he and Mr. Comeau of GM said sales are weak in Central Canada.

GM's sales in Ontario fell by a percentage figure in the low teens in June, Mr. Comeau said.

The U.S. auto sales figures released Tuesday showing a weak 15.6 million annual selling rate are evidence that the export-based economies of Ontario and Quebec are still in danger, Mr. Gomes said.