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The Volkswagen Jetta has dropped in price by about $1,000 for 2013. (Volkswagen)
The Volkswagen Jetta has dropped in price by about $1,000 for 2013. (Volkswagen)

Driving It Home

Five things I learned from the November car sales tales Add to ...

The November sales numbers are in. Canadians are snapping up new cars and light trucks in amazing numbers, but that’s just a tiny piece of the overall 2012 sales story. I dug into the details and emerged with these 10 important things I learned from the November numbers just reported by Canada’s car makers. I’ll go with the first five observations today, and follow with the final five tomorrow.

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1. It’s game-on in the battle for luxury sales crown. A senior BMW official told me last week that his company would do whatever it takes to win finish No. 1 in both Canada and the United States. We’ll see exactly what that means this month. Going into December, BMW brand sales in Canada trailed Mercedes-Benz by 780 units. BMW Canada had a weak November, with sales down 16.1 per cent. Mercedes in Canada was also down, by 2.8 per cent. I doubt BMW will overtake Mercedes this year, not with that sort of lead to overcome. Of course, BMW will argue that Mercedes includes sales of its Sprinter commercial van in its Mercedes brand numbers. And no one would mistake the Sprinter for a luxury car. BMW’s argument is that if you take the 2,718 Sprinters sold this year out of the mix, and the Bavarian car company easily wins the No. 1 spot among premium brands.

2. Slowing economy? What? DesRosiers Automotive Consultants report that we’re tracking to have a monster year for new light vehicle sales in Canada. The November total came to 125,730 units, the second best November on record (behind 2001). That puts Canadians on track to buy “exactly 1.7 million units” this year, says the industry consultant. DesRosiers calls this “an exceptional performance by any measure.” November sales overall were up 3.8 per cent, while year-to-date totals are up 6.5 per cent relative to 2011. “A solid December is widely expected, and Canada has a chance at breaching the 1.7 million unit mark, potentially making 2012 one of the best-ever years for new vehicle sales in this country.” And the doom-and-gloom business pages would have us believe that Canada’s economy slowing. Not if you measure economic health by new car sales.

3. So far, no fallout from the Kia/Hyundai Fuel economy fiasco. Kia and Hyundai have both said they posted false fuel economy numbers of a wide range of 2010-2012 vehicles – about 172,000 vehicles in all sold between 2010 and 2012. “Procedural errors” were to blame, say both companies, which share engineering and testing facilities in South Korea. Some might have though this revelation might hurt sales and so far they’d be wrong. Hyundai sales last month were up 20.0 per cent, while Kia was up 17.8 per cent. Kia Canada’s sales have increased for 47 straight months now; Hyundai had its best November ever and has also seen sales improve for 47 consecutive months. The fuel economy fiasco may have given both brands a black eye, but this does not appear to have been a knockout punch.

4. Audi: a lesson in how to revive a luxury brand in Canada. Audi’s sales were up nearly 30 per cent last month and they’re up 16.2 per cent on the year (18,573 in sales through the first 11 months of 2012). Audi is now a solid No. 3 among luxury brands, trailing only BMW and Mercedes. A handful of years ago, Audi was near to irrelevant among the premium brands in Canada. Then Audi got some needed independence in Canada, along with a massive influx of new models and sales/marketing support. That’s the formula for success in the car business: good product and the structures to support it.

5. Discounting works wonders: I was driving to the office the other day and heard an ad touting $168/month lease payment for the Volkswagen Jetta, which has dropped in price by about $1,000 for 2013. Now look at that: VW Canada sold 2,240 Jettas last month. This one compact sedan accounted for more than half of all VW Canada sales in November (4,659). Year-to-date, VW sales hit 55,355 through November, “a new full-year record with December sales still to go,” said the company in a release. VW is just one example. Run through the least of hot sellers last month you odds are you’ll find a cheap lease payment or a fat cash sales sweetener or both. Discounting works if you want to juice sales.

jcato@globeandmail.com

*****

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