Ford bests rivals after 60 years, as new order emerges

The 1949 Ford convertible

The 1950 Ford, like this 1949 convertible, won Ford's second consecutive Fashion Academy Gold Medal Award for outstanding automotive design and styling. Ford

Auto maker's sales jumped 25 per cent in Canada in June, while those of GM slumped 31 per cent

Greg Keenan

Globe and Mail Update

A new order emerged in the Canadian auto market last month, with Ford Motor Co. of Canada Ltd. F-N on top.

A sales surge sent Ford roaring into first place in vehicle sales in June, for the first time since 1949, ahead of General Motors of Canada Ltd. GM-N , which usually tops the rankings, but has now been knocked out of first place twice in 2009.

Ford, often overlooked amid the massive publicity generated by the bankruptcy filings of its two Detroit-based rivals, has been quietly outperforming the market for most of the year, buoyed by the troubles at Chrysler LLC and General Motors Corp. and its decision to avoid seeking government financial help.

Its sales jumped 25 per cent in Canada in June, while those of GM slumped 31 per cent. In another industry first, Hyundai Auto Canada Corp. surpassed Chrysler Canada Inc. in monthly sales.

The changing of the guard was sparked in part by the collapse of GM and Chrysler's parent companies into bankruptcy protection and a resulting shutdown of all of Chrysler's North American assembly plants and most of GM's factories in June.

The shutdowns starved their Canadian dealers of vehicles, even though the Canadian market has been outperforming the U.S. market this year, with declines in the 20-per-cent range and the teens, compared with slumps surpassing 30 and 40 per cent in the United States.

Industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc., noted Ford's jump into first place is probably not sustainable, because sales at Chrysler and GM are expected to recover once they bounce back from their Chapter 11 bankruptcy filings.

But Ford Canada president David Mondragon has put the pedal to the metal to try to keep Ford ahead, offering employee pricing for Ford buyers for the next two months and a $100 cheque to people who test-drive a Ford vehicle but buy a competing product instead. “It's about momentum, this momentum that we've established all year,” Mr. Mondragon said in an interview yesterday.

Ford is reaping the benefits of staying out of Chapter 11 protection and not being forced to seek the tens of billions of dollars in Canadian and U.S. government assistance doled out to Chrysler and General Motors.

“Consumers recognize the fact that Ford has not asked for government assistance,” Mr. Mondragon said. “That is a contributor for a lot of consumers who are coming in saying ‘Hey, we respect the fact that you haven't taken government assistance and we want to give your product a look,'” he said.

Ford has been able to weather the storm that has crushed its Detroit-based rivals in part because it shored up its balance sheet in 2006 by borrowing more than $20-billion (U.S.) by pledging virtually all its assets, including its Blue Oval logo. That gave the auto maker a head start on Chrysler and GM by allowing it to step up the pace of plant shutdowns and job cuts designed to match production more closely with demand.

“We've restructured aggressively and those efforts are starting to pay off,” Mr. Mondragon said.

Mr. DesRosiers said there is no doubt Ford is having a good year, with market share gains and a resurgence into second spot behind GM in the yearly rankings.

“But the reason Chrysler was No. 1 in February was because GM collapsed and the reason Ford was No. 1 in June was because GM and Chrysler collapsed,” he said.

While Chrysler's sales plunged 58 per cent in June, Hyundai sales jumped again – 25 per cent last month – to underline what has been the best performance of any auto maker in Canada this year.

Hyundai's six-month sales jumped 21 per cent, compared with a 13-per-cent decline for the overall market.

The 13-per-cent decline was the smallest drop so far this year, making June the best month in a brutal first-half for auto makers in Canada.

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