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The Globe and Mail

Chrysler Canada grabs top spot for January

In this photo taken July 24, 2011, new Jeeps are lined up for sale at an Chrysler dealership in Springfield, Ill.

Seth Perlman/Seth Perlman/AP

Chrysler Canada Inc. grabbed first place in vehicle sales last month for only the second time in its history, but Honda Canada Inc. and Germany-based luxury companies posted the biggest gains as overall sales surged 15 per cent.

The jump in Canadian sales outpaced the increase of about 7 per cent in the U.S. market, where Chrysler reported a surge of 44 per cent and, as in Canada, all the major auto makers reported sales gains except General Motors Co.

"It's been a phenomenal January, one of the strongest Januarys in history," Chrysler chief executive officer Sergio Marchionne said Wednesday.

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"We appear to be executing well, both north and south of the border," he said during a conference call on Chrysler's year-end financial results. The No. 3 Detroit auto maker posted earnings of $183-million (U.S.), its first profit since 1997.

The Canadian market is unlikely to outperform the U.S. market this year, said Toronto-Dominion Bank economist Dina Cover.

"We don't have as much pent-up demand as there is in the United States," Ms. Cover said.

Pent-up demand from lack of supply last year helped Japan-based auto makers, but with the exception of Honda's sales doubling, Audi Canada Inc., BMW Canada Inc. and Mercedes-Benz Canada Inc., posted the largest increases with all reporting gains of more than 30 per cent from January, 2011, levels.

Honda noted that the surge came in part because of delivery last month of a large number of Civic models that were ordered last fall, but were not built until last month because of supplier disruptions caused by flooding in Thailand.

Chrysler rode record sales of its Ram pickup truck and Journey crossover utility vehicle to knock Ford Motor Co. of Canada Ltd. out of the top spot that Ford held in 2011 and 2010. Ford's 5-per-cent sales increase pushed General Motors of Canada Ltd. into the No. 3 spot.

GM's sales tumbled 11 per cent and its market share fell to 13.3 per cent – down 3.9 percentage points from a year earlier in the face of the onslaught from the Germans and record January performances by Hyundai Auto Canada Corp., Nissan Canada Inc. and Toyota Canada Inc. GM's U.S. sales fell 6 per cent.

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Germany and Asia-based auto makers also increased their share of the U.S. market last month with Volkswagen AG, Mercedes Benz, Audi and Hyundai Motor Co. among the winners.

"Some people are starting to feel comfortable enough in the economy that they are willing to buy a car," said Jim Hall, principal of 2953 Analytics Inc., an automotive consulting firm in Birmingham, Mich. "Others are saying, 'I've got to replace this old car because it's nickel and diming me to death.'" GM's forecast of overall U.S. sales hitting between 13.5 million and 14 million is "still bang on," vice-president of U.S. sales operations Don Johnson said on a conference call.

"I would characterize the consumer mood as continuing to be one that has an element of caution ... but in general it is much more positive than it was, let's say, six months ago," Mr. Johnson added.

With a file from Bloomberg

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