BOOM! BOOM! BOOM!
Hear that? It's the sound of the latest salvos in the compact car wars of Canada. For most of 2011, this struggle has really been little more than a popgun skirmish. But in the final quarter of 2011, the big guns in small cars are coming out blazing.
It's a story of bitter rivals desperately fighting to win over fickle, demanding buyers. Part of the tale is influenced by the return of full production by major Japanese auto makers after being hammered by the earthquake and tsunami disaster in Japan.
There is a new wrinkle that comes out of Detroit, too.
Who would have imagined that both Ford and General Motors would now have killer compact car entries after both for decades treated their small car entries like delinquent teenagers?
For consumers, getting caught in the crossfire between battling car companies is a magnificent thing. Anyone looking for a $20,000-ish ride is looking at a money-saving bonanza on mostly re-engineered models that compete in the heart of the Canadian new-vehicle marketplace. The roster of compact sedans and hatchbacks for sale has never been better than right now, and yet prices remain flat or discounted.
Consider: Mazda Canada is now shipping to dealers updated and yet less-expensive versions of the popular Mazda3. The Mazda3 has for years been Canada's third-best-selling car and remains so this year, though sales are down 27.1 per cent.
To reverse that slide, Mazda's big story comes in two parts: First, the 2012 Mazda3 is more car for less money, with a starting price lowered by $700 (to $15,595 from 16,295) and more equipment, to boot. The second part of the story is the arrival of Mazda's new SkyActiv powertrain technology – a new four-cylinder engine mated to either of two new transmissions, a manual and an automatic.
Not all Mazda3s for 2012 have SkyActiv power, though anyone can afford to jump up to the starter model with this technology, the GS-SKU ($18,995). The performance is that good and the fuel economy is even better (4.9 litres/100 km city, 7.1 highway). Mazda promises a Herculean push to get the message out about the updated Mazda3.
Then there's Honda. As Greg Keenan reported last week in The Globe, Honda is cranking up production of the Civic at its Alliston, Ont., facility, aiming to tame a shortage of the 2012 model at dealerships, says Honda Canada Inc. executive vice-president Jerry Chenkin. He says the company is scrambling to fill several thousand back orders dating back to March when production was slammed by parts shortages out of Japan in the wake of the quake.
This lack of Civic supply has tightened the race for the title of Canada's best-selling passenger car. The Civic has owned it for the past 13 years, but as of the end of September led the second-place Hyundai Elantra by a mere 1,122 vehicles.
With Civics now spitting off assembly lines in big numbers, Honda is getting aggressive at drumming up demand for a small car that was completely reinvented for 2012 – slapping on sales incentives, just in case, worth as much as $1,000 or more. Honda clearly plans to remain king of the passenger car hill.
Still, the new Elantra is setting the marketplace afire. Elantra sales are up 34.9 per cent so far this year and showing no signs of cooling off. The car is a hit, with sharp styling, direct-injection power and a pretty cabin. Hyundai Canada president and CEO Steve Kelleher demurs when asked if his Elantra can unseat the Civic.
"No, it's not going to happen," he shrugs. Nonetheless, look for the Elantra to finish the year a strong second.
Which brings us to three other new compact entries, all of which are doing swimmingly. Volkswagen's Jetta sales are up 153.3 per cent on the year, putting this one-time sales laggard in sixth place overall among new-car sales.
"VW has positioned AND priced the Jetta to be more of a mass-appeal vehicle and are having considerable success with this strategy," notes auto analyst Dennis DesRosiers of DesRosiers Automotive Consultants. Indeed.
Two other new small cars designed to compete head-to-head with the best of global compact cars are the new Ford Focus and Chevrolet Cruze. The Cruze now is Canada's fifth best-selling car, while the Focus is No. 7.
"With the dumping of the Pontiac brand, General Motors has been reasonably successful picking up entry-level share with the Cruze," says DesRosiers in a note to clients.
The only compact among Canada's best sellers not to get a major makeover in the last year is the Toyota Corolla, No. 4 overall so far in 2011.
The bad news for Toyota is that Corolla sales are down 7.8 per cent this year, though like the Civic some of this can be attributed to lack of supply in the wake of the March earthquake and tsunami. The good news for consumers is that Toyota Canada is beefing up its incentives to bolster sales in the face of a tide of newer models.
Any buyer looking to go new and go small will find all these car companies and their dealers reaching into their kit bag of sales tools – pushing the styling, performance, safety, practicality and fuel economy, while holding in reserve sales sweeteners designed to seal a wavering deal.
Remember, compact car sales are down 5.7 per cent in a car marketplace down by 3.7 per cent. That means compacts are lagging behind the wider world, even though the vehicles themselves have never been better collectively.
So it's a buyer's market as auto makers fight it out in this the last quarter of 2011. That's booming good news for consumers.