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The two largest Detroit auto makers, revitalized with new small car offerings, are reversing the flight to the suburbs that led them to abandon the downtown Toronto market earlier this decade.

Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd. are planning new dealerships in downtown Toronto, buoyed by new compact cars and other vehicles that they believe will make them more competitive against offshore-based auto makers that now dominate an area growing in population amid a condo-building boom.

Kevin Williams, president of GM Canada, confirmed the auto maker is talking to potential investors in a downtown dealership, but would not discuss specific plans such as a location or how many GM brands would be involved.

David Mondragon, Ford Canada president, said the Oakville, Ont.-based company is in discussions with a single investor about opening a dealership downtown.

Ford and GM are first and second in vehicle sales in Canada, respectively, but the downtown Toronto dealership landscape is dominated by a luxury row along the lower Don River on the east side of the core. There, the glass-fronted facade of BMW Toronto has become a landmark and, across the river on the west side, Audi Canada, Mercedes-Benz Canada Inc. and Volvo Canada Inc. have built showpiece dealerships.

Honda Canada Inc. and Toyota Canada Inc. also have dealerships in the central core.

City dwellers tend to buy more passenger cars than trucks or sport utility vehicles. The Japan-based auto makers and other offshore companies took over the passenger car market in the past two decades while Ford, GM and Chrysler focused on trucks and SUVs.

Ford and GM held just 19.7 per cent of the passenger car market in Canada last year.

But both Ford and GM assert that their new small cars and crossover utility vehicles based on smaller platforms will enable them to mount a comeback in urban Canada.

"We're building vehicles that really cater to urban customers," Mr. Mondragon said.

He noted, however, that parts and service business from existing Ford owners would be more crucial, representing as much as 85 per cent of revenue.

The new Fiesta subcompact and the redesigned Focus compact that will arrive in 2011 will help Ford in urban markets, he added.

Ford's share of the Toronto market is about 13 per cent, four percentage points lower than its national average. It has been absent from the downtown Toronto market since 2006.

GM, which shut about one-third of its Canadian dealers or about 230 stores earlier this year, has not sold vehicles in downtown Toronto since 2007.

Dealers familiar with the company's plans said GM wants to build an outlet with all four of its brands - Buick, Cadillac, Chevrolet and GMC - in a store that would sell 1,000 vehicles a year.

That's almost double the national average of 519 vehicles per GM dealer over the past five years.

Sources said GM's market share in the Toronto area is at about 7 per cent, less than half its national share of 15.7 per cent in the first 11 months of 2010.

GM spokesman Tony LaRocca acknowledged that the company's market share in Toronto is lower than it is nationally because of the traditional focus on trucks and SUVs, but he would not provide a figure.

"That is changing quickly as we launch more vehicles that resonate with urban buyers from a footprint and amenities perspective while also delivering very good - often leading - fuel-economy models" he said.

He pointed to the electric-gas Chevrolet Volt and a redesigned Chevrolet Aveo subcompact, both of which will arrive next year, as vehicles aimed at urban drivers.

Buick will add the compact Verano and a small crossover during the next few years.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 7:00pm EDT.

SymbolName% changeLast
F-N
Ford Motor Company
+1.68%13.28
GM-N
General Motors Company
+1.7%45.35
TM-N
Toyota Motor Corp Ltd Ord ADR
-0.19%251.68

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