General Motors Canada truck sales fall 35 per cent in June, dragging down industry

By David Paddon, The Canadian Press

TORONTO - Canadian sales of cars and light trucks, which had been holding up remarkably well for the most part in the first five months of 2008, took a sharp turn for the worse last month as the high price of gasoline cut demand for pickups, SUVs and gas guzzlers.

General Motors of Canada, the country's biggest auto maker, reported a 23.8 per cent skid in overall June sales as the company sold a total of 32,365 cars and light trucks last month, down from 42,466 in June 2007.

GM's truck sales were especially hard-hit, plunging more than 35 per cent compared with a year ago, while its Canadian passenger-car sales dropped 11.5 per cent to 18,122.

"GM Canada's June sales reflected the significant ongoing market impact of rising gas prices and the resulting further consumer shift toward cars and smaller crossovers," stated Marc Comeau, the automaker's vice-president of sales.

"GM is shifting production and adjusting on-the-ground inventories to address demand."

Canadian Auto Workers members blockaded the company's headquarters in Oshawa, Ont., last month to protest the announced closure of GM's pickup truck plant east of Toronto next year.

But GM wasn't alone in suffering a weak June.

Overall Canadian sales of cars and light trucks fell to 159,529 vehicles in June, down 5.7 per cent from 169,174 in June 2007 and down 13.6 per cent from May 2008 when 184,500 vehicles were sold by all automakers, according to DesRosiers Automotive Reports.

The industry's sales of light trucks last month fell by 17.6 per cent to 63,540, compared with June last year, while car sales actually increased to 95,989, up 4.3 per cent from 92,052 a year ago.

Apart from General Motors, the biggest sales decline among the five highest-volume carmakers in Canada last month was at Ford, according to figures compiled by DesRosiers

Ford's overall sales fell to 21,959 vehicles, down 13.7 per cent from 25,439.

Honda Canada also experienced a sales slowdown, although it wasn't as dramatic. Its Honda and Acura divisions sold a total of 16,518 vehicles, down two per cent from June 2007.

Honda said this decline reflected a shortage of inventory of its most fuel-efficient models, the sub-compact Fit and the Ontario-assembled compact Civic.

Honda-badged sales slipped one per cent to 14,918 units, while deliveries for the upscale Acura brand were down 15 per cent to 1,600.

Industry consultant Dennis DesRosiers wrote in a commentary that most manufacturers were complaining about their inability to secure smaller fuel-efficient vehicles for their dealers in Canada.

"This actually bodes well for the next few months as some pent up demand for these products are likely to carry over to the summer selling period."

Until May, sales volumes in Canada had appeared on track to beat 2007 sales, which were the highest in five years.

"The market is slowing though and we don't expect the strong sales from the early months to continue." DesRosiers said Wednesday.

"In fact, sales were down for three of the last four months. We still think that come the end of the year, that sales will be slightly behind last year's number although the market could surprise us by coming in a little stronger."

Toyota-branded sales rose to 20,871, up 7.9 per cent from 19,339 while its luxury Lexus brand rose by 22.4 per cent to 1,557 from 1,272.

Chrysler held steady at 22,048, up 0.1 per cent from 22,029 in June 2007.

German luxury carmaker BMW, meanwhile, said it enjoyed its best June ever. BMW sales were up 6.3 per cent from a year earlier at 2,943, while sales in its Mini division surged by half to 621.

Subaru Canada also announced that it set a new record for June. Its sales volume rose by 34.9 per cent to 1,822 from 1,351.