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Canadian auto market kicks into high gear

Total car and truck sales in Canada rose again in June, reaching 171,608, according to fresh numbers released Wednesday.


Canada's auto industry may have got off to a slow start this year, but sales have now climbed for three months in a row and are on track for a record year.

Total car and truck sales in Canada rose again in June, reaching 171,608, according to fresh numbers released Wednesday.

Buoyed by higher consumer confidence and an improvement in both the labour and housing markets, auto sales in the United States have been strong, and Canada has followed suit, helped along by low prices and incentives, said senior economist Carlos Gomes of Bank of Nova Scotia, who expects a record year for sales.

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"I think the key point about the market is just how much more competitive it's become," Mr. Gomes said. "The difference between the major auto makers has become fairly small with just a couple of thousand separating Ford from Chrysler and GM on a monthly basis. Even Toyota and Honda aren't that far behind."

Vehicle prices are rising at a pace slower than the already tame rate of inflation, while truck sales are strong in Western Canada, he noted, adding that heightened competition has sparked various incentives.

"It's a great time to buy a new vehicle," Mr. Gomes said. "Some of the affordability measures that we calculate suggest that this is the best time to buy a vehicle in probably over 30 years."

In both the United States and Canada, pickup trucks are the strongest sellers this year, so it's no surprise that Ford Motor Co. of Canada Ltd. – whose F series trucks have been hot sellers – remained Canada's top auto maker last month, if barely.

Ford sold 28,713 vehicles in June, a decline of 6 per cent. But over the course of the first six months of the year, sales rose by 3.2 per cent, with most of the increase driven by trucks.

It was the best June on record for its F-150 and F-150 Super Crew, whose sales gained 15 per cent and 18 per cent, respectively.

Chrysler Canada Inc. sold 26,222 vehicles last month, an 11-per-cent increase over June, 2012, sales.

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That marks the 43rd consecutive month of year-over-year sales growth for Chrysler, which has put most of its eggs in the passenger car basket. Growth in that category was up 46 per cent in June, compared with results from the same period a year earlier.

But Chrysler also sold 7,176 Ram pickup trucks last month, a 16-per-cent increase over June, 2012.

Right behind Chrysler, General Motors of Canada Ltd. sold 24,707 vehicles in June, an 8-per-cent increase.

As with Ford, sales of pickup trucks led the charge for GM, which saw a 10-per-cent increase of those vehicles in sales last month.

Toyota Canada Inc. sales slipped 4 per cent last month, with 18,338 vehicles sold.

Sales of Toyota's RAV 4, however, broke records, with 3,193 of the small SUVs sold, an increase of 38.8 per cent for June.

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Honda Canada Inc. sold 14,971 vehicles, a 10-per-cent increase.

Kia Canada Inc.'s sales remained pretty much flat, with 7,775 new vehicle sold last month, compared with 7,782 in June, 2012.

There are two reasons for the recent popularity of pickup trucks in Canada, according to Mr. Gomes.

Part of it has to do with incentives that the auto makers have lavished on the light truck sector in the past few months, and part has to do with regional economies.

"The truck segment is much stronger out in Western Canada and it's the Western Canadian economy that is doing much better than is the case in Central and Atlantic Canada," Mr. Gomes said.

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