In a tough month, here are the winners and losers for June in Canada

And so, this wonderful run of strong new car/light truck sales in Canada has come to an end.

June saw car buyers pull back noticeably for the first time since March 2013 – brining a shocking decline in year-to-date light vehicle sales, something we haven’t seen in Canada for half a decade, notes DesRosiers Automotive Consultants.

“As of the end of June 2018, a total of 1,036,677 new light vehicles were sold in Canada, down 0.2 per cent compared to 2017 when a total of 1,039,068 new light vehicles were sold,” reports DesRosiers in a note to clients. June sales slipped 1.6 per cent, year-on-year, to 200,156 from 203,486 in 2017.

Car sales continued their downward plunge, off 8.0 per cent, while light truck sales were up 1.4 per cent.

Winning brands: Hyundai’s Genesis, up 175.0 per cent, says DesRosiers. Volvo, smart, and Land Rover were up 44.3, 26.5, and 23.3 per cent respectively. Subaru (+5.1 per cent), Nissan (+0.9 per cent) and Infiniti (+16.3 per cent) were up, too.

“Overall, 16 out of 26 reporting automakers witnessed sales increases,” says DesRosiers.

That’s the big sales picture. Here’s a closer look at June’s winners and losers:

Honda’s Civic is still Canada’s best-selling car, but Canadians are rapidly losing their taste for cars of all sorts.

Loser: Honda/Acura. July, overall, was brutal for Honda and Acura in Canada – lots of losers, with sales overall down 2.6 per cent (to 18,754), year-on-year. Acura, specifically, was down 4.7 per cent, despite the very successful launch of the Acura RDX, with year-on-year sales up 24.2 per cent. My goodness, the CR-V provided the only winning news, with sales up 22.2 per cent in June and 17.6 on the year. The losing is frightening across the Honda line: for the year, sales are down for these core models: Civic (-4.4 per cent), Accord (-12.7), HR-V (-25.6), and Pilot (-15.2). Acura is up 2.1 per cent on the year, but why is the exceptional NSX super sports car such a loser, down 15.6 per cent on the year. Only 27 – 27!!! – Canadians have bought Acura’s halo car in 2018. Incredible.

Winner: Kia – Sales overall were up a modest 2.3 per cent in an overall down month, but Kia did have the best Canadian June in its history. Kia will keep juicing sales with deals during the usual summer doldrums, too: 0 per cent financing plus a $2,000 cash giveaway on select models. And you won’t need to make a payment until October.

Loser: Mercedes-Benz. Sales slipped 2.4 per cent to 4,904 in June. Merc Canada tried to sugar coat this with news by touting a best-ever first-half performance — 26,845 units sold, for a 1.4 per cent increase over the same period in 2017. Was June a blip or a harbinger?

Mazda’s SUVs are on fire.

Winner: Mazda, or more specifically, Mazda’s SUVs (sport-utility vehicles). Sales of the CX-3, CX-5 and CX-9 are up 20.2 per cent on the year (to 22,670), but June was really amazing – combined sales up 29.4 per cent (4,462). Sadly, the MX-5/Miata roadster, a wonderful car, is a loser: June sales down a stunning 63.6 per cent year-on-year. Only 84 Canadians bought Mazda’s roadster in June, a prime selling month.

Loser: Toyota. Combined Toyota/Lexus sales slipped 0.6 per cent in June, with Toyota brand sales down 1.1 per cent to 20,833 units. Ah, but Prius hybrid sales jumped 28.3 per cent and sales of the Prius Prime plug-in hybrid totaled 413. Selling 400-plus plug-ins in any one month is certainly a winning achievement, but Toyota has problems in some other parts of its lineup.

Winner: Jeep.  Jeep sales were up 22 per cent for the first half of 2018 and June sales increased 6.0 per cent to 6,215 units. Big winners: Jeep Cherokee (+ 41 per cent to 2,296 units) and Grand Cherokee (up 13 per cent).

Loser: Ram sales were a loser, down 21 per cent overall, with Ram pickup down 19 per cent (to 9,151). Fiat Chrysler will tell you this slide is because the Ram brand is transitioning from the old Ram to a brand new version.

Winner: Volvo. Geely-owned Volvo Cars in Canada saw sales jump jumped 44.3 per cent in June (to 919 units). That’s 33 straight months of year-on-year sales increases. Oh, to be a Volvo dealer these days. Volvo Canada’s sales are up 42.6 per cent this year, BTW. The 2019 Volvo S60 sedan will help drive sales going forward, though it’s the SUVs – especially the V60 – that are the heartbeat of that growth.

The Subaru Ascent gives the brand a three-row rig.

Winner: Subaru. Sales up 5.1 per cent in June (to 5,348 units. Half year, Subaru is up 5.5 per cent and is on track to beat last year’s 54,570 units sold. I remember when Subaru sold literally one-tenth of that in a given year. A three-row Subaru, the Ascent, is coming, but it’s affordable rigs like the compact Crosstrek SUV that are central to Subaru (1,410 units sold in June, an increase of 63.6 per cent year-on-year).

Winner: Nissan/Infiniti. Nissan Group sales inched up 2.0 per cent to 16,330. Infiniti jumped 16.3 per cent (1,398 units). Nissan’s best-selling vehicle in Canada, the Rogue crossover, continues to achieve strong sales, with 4,342 vehicles sold in June. Sales of the LEAF EV were noteworthy: 492 units. The little Qashqai compact crossover totaled 2,150 and that makes it a winner.

Winner: GM. General Motors haters are legion and they will not be denied their bilious views, but if we just look at the numbers, this once-bankrupt automaker is rolling. Chevrolet, Buick, GMC and Cadillac dealers delivered 27,638 vehicles in June, an increase of 1.8 per cent year-over-year. GM is on track to deliver more than 300,000 vehicles in Canada for 2018. GM Canada has gained almost half a point of market share in 2018, to 14.9 per cent. Ford Canada is down a similar number, to 15 per cent of market share. Could GM Canada finish the year No. 1 in sales in Canada for 2018?

Land Rover sales remain strong.

Winner and loser: Jaguar Land Rover. June sales for JLR hit 1,306, a jump of 9.0 per cent over June 2017’s record. But drill down a bit and one finds that Land Rover did 926 units, leaving Jag at 380. You can see which brand is in the driver’s seat. I mean, Land Rover was up 23 per cent in June. The Range Rover Sport accounted for 293 of total sales. Jag, with six models, should have done better. F-Pace led the way with 217 sold. Jaguar needs to pick up with pace, pun intended.

 

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Of guns and pickups: the truck boom explained

Canadians bought more than a million condo-sized pickups from 2015-2017.

Most popular among them, notes DesRosiers Automotive Consultants, was Canada’s best-selling vehicle, the F-Series; Ford sold 155,290 last year. What? Really?

Sure, the post-recession construction boom has put money into the pockets of Canada’s carpenters, electricians and assorted trades people. Many now drive a new rig, of course. Likewise, ranchers, farmers and outdoor enthusiasts have gone new, and in big numbers.

Above all, though, the pickup explosion fits into the broader trend in luxury vehicle sales – which have about doubled since 2000. Make no mistake, today’s pickup is a premium ride, just one capable of pulling a houseboat. How premium? The $57,199 Ford F-150 Supercrew 4×4 I just tested was tricked out with extras to $74,699.

As well, for up to half of buyers, the pickup is the family wagon of choice – like minivans were in the 1980s. The family appeal is obvious. The F-Series, Fiat Chrysler’s Ram, Chevrolet’s Silverado and their ilk have oceans of cabin room and they all put the driver up high, with great visibility through high rise-like swaths of glass.

Big trucks are safer, too. Size matters in any crash. And despite the shrinking beds – most noticeable in “crew” or four-door rigs – there are undeniable payload and towing benefits.

The pickup boom has also gotten a boost from fuel economy regulations in the United States – regulations we follow in Canada. They are based on a vehicle’s footprint or size. Generally, the larger the vehicle, the laxer the fuel efficiency target.

The Wall Street Journal’s Dan Neil notes that the footprint rule “effectively incentivizes building larger vehicles by holding them to progressively easier standards. As a result, the largest and most profitable vehicles also enjoy the lowest relative costs of (fuel economy) compliance.” This benefits Detroit automakers which are utterly dependent on pickups and SUVs (sport-utility vehicles) for revenue and profits.

Indeed, U.S.-based TrueCar notes that the F-150 is by far the most popular vehicle selling for more than $50,000 (all figures in U.S. dollars). The Ram is No. 2 and Chevy’s Silverado is No. 5. Ford says the average F-150 sells for $45,400.

Ford, we know, makes $14,000-$17,000 profit on every F-Series. And Ford brags that the F-Series generated $41.25 billion in North American revenue in 2017. Detroit is a one-product town and it’s the pickup.

But what sets pickups apart is their status as an expression of powerful social, cultural and political sensibilities. Detroit’s automakers make good pickups but the marketing is even better – marketing that positions the pickup as a metaphor for machismo and what some call “family values.” You can see this in pitches that are rife with rugged images of the so-called American “ideal.”

If you drive a Chevy pickup, you’re “like a rock.” If you drive a Ford, it’s a “way of life.” Ram pickups are “built to work” and “work the land.” This vision of the pickup as cultural icon is brought to life in Ronnie Shows’ paean to pickups and guns (www.realclearpolitics.com).

Shows, a former congressman from Louisiana, writes that “…the love of trucks is similar to the love of firearms in rural America. Trucks and guns are both deeply ingrained in my community.” If you advocate for tougher fuel economy rules, you’re attacking my way of life, argues Shows. So, keep your hands off my guns and my truck.

“I have a truck, most of my friends and neighbors have trucks, and they are integral to a culture that cherishes a lifestyle more closely tied to the land and sea,” writes Shows in www.realclearpolitics.com.

I appreciate the passion but question the wisdom of advocating for brutish gas guzzlers as a lifestyle choice. Yes, I’ll confess: commuting in the new Ford pickup was fun. For a week. On the eighth day I tired of fighting to park that rig in town, my social conscience started to nag at me, and I loathed the $115-plus fill-ups.

Liberals will never argue away the cultural and highly emotional parts of the pickup boom. Rising fuel prices, however, will do what liberal carping can never accomplish — snuff out the big rig explosion. Analysts are predicting $3-plus (US) gas in the U.S. this summer and there are signs of higher pump prices in the economic pipeline.

Expensive fuel will wound large vehicle sales, as in the past. Count on it. You can romanticize your rig, Ronnie Shows, but you will eventually find it unaffordable, even as the Trump administration dismantles Obama-era fuel economy rules.

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Quirky, defiant little Mazda and the CX-5

Quirky little Mazda Motor is a rebellious, independent-minded and outspoken carmaker with a no-apologies love of cars in general and the driving experience in particular – and the CX-5 compact sport-utility is a perfect example of what this actually means.

Tall and entertaining.

You will not find a more entertaining little rig amongst its many, many, many competitors. The Mazda’s steering is sharp, the brakes strong. The grippers here are a lovely example of how to put feel and response into the stopping powers of a tall, functional rig whose apparent first purpose in life – for buyers — is to drag home do-it-yourself furniture from IKEA.

The 187-horsepower petrol engine in my GT tester ($38,495 as tested) is NOT turbocharged, yet it is lively and just what you’d expect from a car company skilled at squeezing performance out of small displacement mills, rotary or otherwise. The six-speed autobox delivers sharp shifts and encourages enthusiastic drivers to play with the paddle shifters – to control your own gear changes.

In short, if you want a small rig with some heart and soul, get the CX-5. If a simple, thoughtful, accessible infotainment interface will win your heart, this is your choice. If you insist on a tallish wagon with firm seats, an excellent driving position, admirable outward visibility and good-quality materials all-around, you must at least test drive the Mazda.

Indeed, if you remain skeptical about the much-hyped electrification of the car market, if you just want a fuel-efficient small/tall wagon, the CX-5 is an obvious selection. It’s not a hybrid or a plug-in of any sort and you will need to drive it yourself.

Clean, useful and best of all, simple.

In a nutshell, if you enjoy the drive and remain dubious about the imminent arrival of all these much-hyped autonomous or “driverless” cars, then Mazda and its CX-5 should most certainly have a place in your heart.

Because, folks, Mazda has long been the champion of truth and honesty when it comes to automotive technology. It’s not that Mazda denies there is a future in the electrification of the automotive fleet; rather, Mazda is simply sanguine about the timeline for the wholesale, broad adoption of EVs (electric vehicles) and self-driving rides of all shapes and sizes.

Sure, these technologies are coming, but not immediately. In the meantime, what about normal, sensible people who retain an emotional connection to driving?

They will find a home in Mazda’s products, including the CX-5. This SUV is not the absolute winner in reliability and quality studies, but it does just fine. However, if you want a little truck-like runabout that trades on its unbreakable-ness, then the Toyota RAV4 or Honda CR-V are probably more up your alley.

If you want the latest in 4G LTE technology, the you might want to look at the Chevrolet Equinox or GMC Terrain.  Kia’s Sorento and Hyundai’s Tucson are well-built, strong designs available with some very interesting engine technology at reasonable prices. However, the brands remain a tad weak and the road manners need work.

For drivers.

Ford’s Escape is very close to the CX-5 in terms of driving dynamics and it’s available with all sorts of fancy technologies. But Ford’s quality has been dreadful for years and there are few signs that the company takes these woes seriously.

If you know the owner of a small Ford, in fact, you probably know someone who’s gone through several transmissions. In fairness, however, Ford has picked up its game a little when it comes to the Escape, though I remain wary and you should, too.

Volkswagen’s Tiguan is okay but nothing about it stands out other than a pretty decent reliability record. Nissan’s Rogue is well-priced and kind of pretty, but it’s saddled with a CVT (continuously variable transmission) that is the very antithesis of entertaining technology. And the materials inside fall on the wrong side of cheap.

As for the newest version of Jeep’s Cherokee, well, the styling is attention-getting, but like Ford, the Jeep brand’s long, long history of sub-par quality is a red flag. Subaru’s Forester, by the way, is a stolid player here and very safe. A new version is coming shortly, so if you want the outgoing model, drive a hard bargain.

The back seat.

As for the CX-5, I will warn you about the pricing. With freight and such, my tester tipped over 40 large. That said, the all-wheel-drive responses are both subtle and superb, fuel economy is strong, and the all-independent suspension layout keeps the car planted and controlled, despite the high centre of gravity.

The Mazda people love the drive and it shows here.

2018 Mazda CX-5 GT

Base price: $35,000. As tested: $$38,495. Freight, dealer prep: $1,895. (Base CX-5: $25,900.)

Engine: 2.5-litre I4 (187-horsepower/186 lb-ft of torque)).

Transmissions: 6-speed automatic.

Drive: all-wheel.

Fuel economy (litres/100 km): 9.8 city/7.9 using regular fuel.

Comparables: Toyota RAV4, Honda CR-V, Hyundai Tucson, Kia Sorento, Volkswagen Tiguan, Ford Escape, Jeep Cherokee, Chevrolet Equinox, GMC Terrain, Subaru Forester.

 

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Trump brings his chaos to car biz

Canada has a Ministry of Environment and Climate Change headed by the esteemed and very well-spoken Catherine McKenna from Ottawa Centre.

McKenna, a heavyweight in the Liberal cabinet and an obvious aspirant to the prime minister’s job, is an international trade lawyer who participated in negotiating the Paris Climate Accord. Bravo.

Not everyone agreed with President Obama’s fuel economy and emissions regulatory plan, but it was predictable, it allowed the industry to plan for the long term and it has proven to have helped change consumer and social norms and attitudes.

Alas, nothing she can say or do, no amount of good will, smarts or ambitious manoeuvring, will likely stop the next bit of crazy from the sociopathic numbskull that is U.S. President Donald Trump. The implications for Canada and the rest of the planet are serious if not dire. For the auto industry, what Trump appears poised to do is disastrous.

You see, reports indicate that Trump is about to roll back Obama-era greenhouse-gas and fuel-economy standards that really have been the industry guide dating back to 2008-2009. Obama’s plan was given real teeth, however, in 2011, and since then the car business globally has invested hundreds of billions in a drive to reduce greenhouse gases, improve overall fuel economy and electrify the passenger car fleet.

Trump is finding cover for his utter stupidity in a long-standing and somewhat disingenuous request of a slightly schizophrenic auto industry. That is, the car business, through its industry group, begged Trump during the U.S. election campaign to relax Obama-era standards. Even so, individual companies – Ford Motor and General Motors among them — say they are generally supportive of the Obama-era regulations. Don’t kill them, they, say, but do build in a little flexibility, if possible.

Flexibility is unnecessary and to understand why, let’s pause for a moment and go back to the summer of 2011. Flanked by auto industry titans, Barack Obama announced aggressive new targets on US fuel economy standards. They were generally welcomed as an “historic agreement” that would prove to be good for both the economy and the planet.

Canada, of course, has since fallen in line. It’s government policy. Transport Canada officials have told me several times that its goal is to harmonize Canada and U.S. “regulations as much as possible.” Our government’s priority, then, is to harmonize Canadian regulatory requirements with those of the U.S. Our Climate Change ministry and its minister are not going to change that. And our car business, completely dominated by foreign companies, will sell us whatever meets standards in the U.S. Period.

And so, for about a decade the car business has been aligning itself with ever-stricter fuel economy and emissions rules. That is, in 2008, fleetwide standards were set at 35 mpg (US) by 2016, ratcheted up to a fleetwide average of 51.4 mpg (US) by 2025.

These regs explain why in recent years we’ve seen an explosion of fuel-savings technologies in new cars and light trucks – from  stop-start systems to lightweight materials, streamlined designs, advanced engine technologies, hybrid drive systems and such.

As well, to meet expanding zero-emissions mandates, car companies from Beijing to Tokyo, from Seoul to Detroit, Coventry, Stuttgart and Munich have accelerated their electric vehicle product plans. There has been an obvious change is the marketplace as a result of a near-decade of regulatory compliance and future product planning.

We are now seeing a growing fleet of evermore fuel efficient and electrified new models. This industry has reinvented itself dramatically in the last decade and everyone is better for it. The new technologies planned through 2025 hold the promise of slashing billions of tons of carbon dioxide emissions. They are also saving consumers money at the pump and at the EV charging station and will do so more and more in coming years.

Trump, who even his chief supporter, Ann Coulter, now calls “a shallow, lazy ignoramus,” has made it his mission to dismantle as much of the Obama legacy as possible, regardless of harm and without any interest in the well being of the planet. For Trump, this is obviously personal. And so this looming change to fuel economy and emissions regulations.

But there are broader implications to consider.  The most obvious one is for the planet. But even if you are a moron — that is, a climate change denier – you might be able to understand the economic implications.

That is, this Trumpian move will throw the auto industry into chaos and threatens the long-term health of Detroit-based automakers, Ford, GM and FCA.

Here’s the problem. China and Europe, the world’s largest and third-largest auto markets, are pushing full-steam-ahead with ever-tightening regulations. The stated goal everywhere but in Trumpland is to phase out the internal combustion engine and replace it with electrification.

As well, a number of U.S. states, led by California, also plan to proceed using the Obama/EPA template and say they will sue Trump’s Environmental Protection Agency if there is any attempt to force them to comply with weaker environmental rules.

You can see the incipient chaos: car companies forced to comply with an even greater hodgepodge of state AND international fuel economy and emissions rules – or withdraw from particular markets. Shifting and whimsical regulatory standards are a nightmare for an auto industry that needs years and even decades to develop, test, certify, implement and sell new technologies that meet evolving standards.

Not everyone in the car business liked Obama’s plan, but it was at least predictable. It provided a clear template with attainable demands set out on a reasonable timeline. President Dolt, as usual, looks to throw the auto industry into chaos and hurt the planet at the same time.

And there is nothing our Ministry of Climate change will be able to do about it.

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Winners and losers of 2017: slumping cars, surging trucks

Nissan’s Sentra compact car jumped onto the list of top 10 best-selling passenger cars of 2017. So, why isn’t the Sentra a winner (and no jokes about the hum-ho styling)?

The Toyota Corolla, Canada’s No. 2 seller among cars and a winner.

Easy. Sentra sales were down last year, by 2.8 per cent. Not great. Yet that performance was strong enough to take the No. 10 spot on the list of 2017 best sellers. Cars.

Here’s the thing: the overall passenger car market slumped 3.4 per cent in 2017, notes DesRosiers Automotive Consultants. Meantime, light truck sales jumped 8.7 per cent.

Canadians, in fact, bought more than twice as many pickups, vans and sport-utility vehicles as passenger cars – 1,398,975 versus 639,823. And the most popular light trucks were compact SUVs (424,760), while compacts were the most popular cars (389,838).

The Sentra was kind of a winner because sales did not slump as seriously as the overall passenger car market.

Ford’s F-Series pickup was also sort of a winner. Sales last year were up 6.8 per cent (155,290), making Ford’s popular full-size pickup the most popular light truck in the country. Yet sales in the overall large pickup segment jumped a whopping 13.1 per cent.

Rivals to the F-Series all performed better than the No. 1 rig: Ram sales were up 10.6 per cent; GMC Sierra sales were up 21.1 per cent; and Chevrolet Silverado sales surged 31.5 per cent.

When taken in context, then, the F-Series held onto the No. 1 crown for another year, even though sales lagged major competitors. Does that suggest problems ahead for the F-Series? Consider: FCA (Fiat Chrysler) and General Motors soon plan to launch reinvented versions of their big rigs. Hmm. This is going to be interesting.

Honda Civic: still No. 1 and a winner.

On the car side of things, Honda’s Civic remains Canada’s most popular car – and did so in winning fashion. While car sales continued to slump in 2017, Civic sales were up 6.8 per cent last year (69,030 Civics sold). Toyota’s Corolla was also a winner, with sales up 10.3 per cent to 50,332 units.

Another compact car winner: Kia’s Forte. The Forte finished 2017 as No. 8 overall after sales surged 33.3 per cent to 16,388. The Forte was redesigned last year. Yes, buyers noticed and approved of the changes – not to mention the discounts slapped on virtually all the cars on the top 10 list, not just the Forte.

Luxury vehicles were winners, too. The overall luxury segment was up 6.1 per cent, notes DesRosiers, while sales of higher-end luxury vehicles jumped 18.7 per cent and luxury sport-ute sales were up 7.6 per cent.

A big loser: small vans – minivans. Sales slumped 2.8 per cent.

On the other hand, subcompact sport utilities jumped 32.6 per cent and compact luxury SUVs were 16.6 per cent. Winner, winner.

For more, here’s a look at the top 10 best-selling cars and light trucks for 2017:

Passenger Cars

2017            2016          % gain/loss

1 Honda Civic                         69,030        64,552           6.9%

2 Toyota Corolla                    50,332         45,626        10.3%

3 Hyundai Elantra                 46,112         48,875         -5.7%

4 Mazda3                                27,862         26,824          0.6%

5 Chevrolet Cruze                  27,520         26,824          2.6%

6 Volkswagen Golf                 22,288          17,513       27.33%

7 Volkswagen Jetta                 17,483         20,954       -16.6%

8 Kia Forte                               16,388          12,296        33.3%

9 Toyota Camry                       14,574          15,683          -7.1%

10 Nissan Sentra                     13,883          14,281         -2.8%

 

Light Trucks

1 Ford F-Series                       155,290      145,209           6.8%

2 Ram pickup                           98,465        89,048         10.6%

3 GMC Sierra                            61,883          51,091         21.1%

4 Chevrolet Silverado             59,066          44,932         31.5%

5 Toyota RAV4                         50,894          49,103           3.6%

6 Honda CR-V                          50,443           44,789         12.6%

7 Ford Escape                           47,880           46,661           2.6%

8 Dodge Caravan                      46,993           51,349          -8.6%

9 Nissan Rogue                         43,418           40,055          8.42%

10 Hyundai Tucson                   30,467           23,789          28.1%

Source: DesRosiers Automotive Consultants

 

 

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