[seifufu]

November auto sales slow
Canadian vehicle market may be softening after five years of strong growth, industry analyst says
Tony Van Alphen

Business Reporter

Dec 04, 2007

Canada's auto market sputtered badly last month despite the biggest incentive boost in the industry's history.

Sales and leases of new autos dropped 5 per cent, or more than 6,000, to 117,284 cars and light trucks in November from the same month last year, manufacturers reported yesterday.

The negative results could prompt automakers to increase incentives again during the next few weeks because consumers are waiting for even better deals, according to one analyst.

Some consumers have also remained on the sidelines because they perceive lower transaction prices in the U.S. than in Canada – and hope prices will drop further.

Their initial reaction came after they saw many vehicles on U.S. dealer websites at thousands of dollars less than here, despite a soaring Canadian dollar that had topped its American counterpart in value.

Automakers responded last month by sweetening their holiday incentives with thousands of dollars in extra savings, ranging from cash-back deals and a 1 per cent cut in the federal goods and services tax to no-interest financing and cancellation of down payments.

"There is an interesting consumer psychology in play," said industry watcher Dennis DesRosiers. "When prices drop drastically, like they did in response to our above-par dollar, consumers will often sit on their hands and wait for prices to fall even further."

DesRosiers noted the market is softening and the need for vehicles by Canadians is at an all-time low after strong sales for five years.

He also noted that monthly sales figures from Canadian manufacturers may not accurately reflect the market in November because of a surge in consumers who bought vehicles in the U.S. and imported them back into Canada.

Despite the decline, the industry is still heading to its second best performance ever.



Sales for the first 11 months are up 3 per cent, or about 45,000 vehicles, to 1.53 million vehicles from last year when the industry set its second-best mark. The industry hit its record of more than 1.7 million vehicles sold in 2002.

Every major automaker except Chrysler Canada posted losses in November.

Chrysler's business jumped 7.1 per cent to 18,419 vehicles, the 16th consecutive month of improvement from the same period a year earlier.

That leaves Chrysler with a comfortable lead over Ford Motor Co. of Canada Ltd. for second place in annual sales.

Despite a good lead and momentum, Dave Cunningham, Chrysler's vice-president of sales, revealed the company plans to bump incentives higher on some models including Ram pickups and Caravan and Town & Country minivans during the next few weeks..

Cunningham said other players could also increase incentives this month and early next year. "I think we'll see some aggressive cash offers into the start of next year," he added.

Among last month's losers, General Motors of Canada Ltd. said its sales tumbled 10.2 per cent, or more than 3,000 units, to 28,071.

Volume at Ford fell 8.4 per cent to 15,909 vehicles in November while business at Toyota Canada Inc., including the luxury Lexus division, dropped 8.3 per cent to 12,554.

Honda Canada Inc., including the luxury Acura brand, said its sales decreased 2.7 per cent to 13,676 while deliveries for Nissan Canada Inc., including the Infiniti nameplate, dropped 13 per cent to 4,858.

Sales at Hyundai Auto Canada dropped 5.1 per cent to 5,510 and business at Mazda Canada declined 10 per cent to 4,715.

Business for BMW Group Canada, including the Mini brand, hit a November record as business shot up 16.2 per cent to 2,221.

Kia's volumes also soared 17.3 per cent to 2,765 in November.

http://www.wheels.ca/article/34583

[Alex_bm]

Thanks, some interesting info.

BMW has very sweet deals now, which is good for buyers today. People who bought cars couple months ago just lost few grand on their future car value.

[Slke46]

Originally Posted by Alex_bm

Thanks, some interesting info.

BMW has very sweet deals now, which is good for buyers today. People who bought cars couple months ago just lost few grand on their future car value.

Son of a B#%A@!!!!

[giddyup69]

Originally Posted by Alex_bm

Thanks, some interesting info.

BMW has very sweet deals now, which is good for buyers today. People who bought cars couple months ago just lost few grand on their future car value.

like what? i just ordered an e93. all bmw offered was a 1500 cash back... plus i still had to play the negotiation war game for better pricing off the car and my trade-in.

[sparkyg]

The BMW deals are on leases which it appears accounts for about 80% of its business for 3 series.

Not sure if 80% is accurate, I just think it is a high %. It'd be interesting to do a poll and see how many people actaully buy their car and not lease it.

Financing is also a good deal. Honda/Acura are at 0.9% financiing, BMW is at 2% which is still a great deal.

[Alex_bm]

I was told some time ago that BMW leases are around 60% of its total business. Cash and finance deals are pretty much split.
The thing that most won't notice is the residual, which also went down compared to last year.
Those leased cars will go for sale as used in 3 years or so and will account for majority used BMW's.
Obvoiusly for 3 -series the difference will not be as significant as for 5 or 7 series, but still.

There is also another consideration.
I leased almost base 328 sedan about 8 months ago when lease rates dropped to 4.9. Right now I would get the same car for 50$ months cheaper. That's 1800$ for total lease duration.
Now many folks got 6.9% or 7.9% rates for fully loaded 335's. Difference in lease payment might significant. Lower monthly payments for new cars will dictate lower prices for used cars respectively.
Nature of the market.