Go to the Globe and Mail homepage

Jump to main navigationJump to main content

The Ford Edge is shown in this July 13, 2011 picture. (Peter Power/The Globe and Mail)
The Ford Edge is shown in this July 13, 2011 picture. (Peter Power/The Globe and Mail)

Auto sector makes slow but steady gains in North America Add to ...

The recovery in North American vehicle sales continued in 2011 but at a tepid pace caused by shortages of auto parts from Japan and wariness among debt-laden consumers battered by grim economic news.

Auto makers eked out a 2-per-cent gain in Canada last year, compared with a 10-per-cent jump in U.S. sales, which gave senior executives in Detroit confidence that the recovery will roll on in 2012.

More related to this story

Americans bought about 12.8 million vehicles – the second straight increase from the depths of the 2008-2009 recession – and are expected to buy another 13.5 million this year.

Those numbers are still at recessionary levels, but that’s not entirely negative, Don Johnson, vice-president of U.S. sales at General Motors Co. said Wednesday.

“This pace of growth for the industry is good for the industry and good for the country,” Mr. Johnson said on a conference call with analysts and reporters. “It creates jobs. That is obviously the immediate payoff, but it also gives the industry the opportunity to really institutionalize the discipline that has helped us all prosper at historically lower sales levels.”

Canadians drove 1.586 million new vehicles off dealers’ lots, up slightly from 1.577 million a year earlier.

That number could have been two percentage points higher, but for the March 11 earthquake that choked off parts suppliers and led to vehicle shortages for Honda Canada Inc., Toyota Canada Inc. and other Japan-based companies, said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc.

But the constant drumbeat of bad economic news and average vehicle transaction prices in the $40,000 range gave debt-burdened Canadian consumers pause, Mr. DesRosiers said.

“Our [household]balance sheets have really deteriorated in the past four to five years,” he said.

December sales figures provided some evidence of a comeback by the Japanese companies as Toyota’s sales soared 42 per cent and Nissan Canada Inc. reported a 33-per-cent surge.

Ford Motor Co. of Canada Ltd. kept the title of best-selling auto maker in Canada for the second straight year, although a dip in December sales marked the fourth straight month of declines at Ford.

Ford stayed ahead of General Motors of Canada Ltd., whose sales declined 2 per cent in 2011 as it lost market share to Chrysler Canada Inc. and Hyundai Auto Canada Corp. Chrysler’s market share jumped 1.4 percentage points, the largest gain among any auto maker.

Several auto makers reported record annual sales, including Hyundai, Nissan, BMW Canada Inc., Porsche Cars Canada Ltd. and Volkswagen Canada Inc.

A strong increase in Civic sales helped the Honda Civic hang on to the title of best-selling passenger car in Canada, while Ford’s F-Series pickup truck claimed the truck crown.

But Mr. DesRosiers described it as the “year of Europe” because all brands based in the region reported sales increases.

Just as Japanese companies gained in the 1990s and South Korean auto makers surged over the past decade, “three years in, this decade is shaping up to be for the European brands,” he said.

GM said it expects U.S. sales to rise to between 13.5 million and 14 million vehicles this year.

But that’s well below the more than 16 million units annually that the industry racked up in the first part of the 2000s.

A recovery close to such levels is unlikely until 2013 to 2014, Matthew Stover, auto industry analyst for New York investment firm Guggenheim Securities LLC, said in a report.

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular