Not all bad news in volatile auto industry

[OntarioVanMan]

By Mark Richardson

You know, it's been grim this year reporting on the state of the auto industry. Sales are down, jobs are gone, times are tough. Two of the largest carmakers are in Chapter 11 bankruptcy proceedings in the United States – is there no good news?

There is if you're Audi Canada. Its sales in June were up more than half as much again as June of last year. In the year so far, its sales are up 17.4 per cent. They're cracking the champagne at head office.

Another German carmaker, Mercedes-Benz, is up 17.8 per cent in this country so far this year from last year, and since it's sold more than twice as many vehicles as Audi, it's even happier. With nearly 12,000 cars and SUVs out the dealership doors so far, this is a record year for the Canadian distributor.

It's not just premium vehicles that are weathering the market here. Mitsubishi, Volkswagen and Subaru have all steadily increased sales, albeit by relatively small amounts. But they pale next to Kia, which has upped its Canadian sales by 18.5 per cent this year from last year, and Hyundai, the success story to beat them all.

With more than 52,000 Hyundais sold up to the end of June, an increase of more than 21 per cent over this time last year, the Korean carmaker has leapt into the Big Six of auto manufacturers, ahead of all but GM, Ford, Chrysler, Honda and Toyota. And it's the only one of those makers to post an increase.

It's easy to be successful when times are good, but right now? How do they account for it?

"We have some new products that are helping us this year," says John Vernile, Hyundai Canada's vice-president of sales and marketing, "but we've also capitalized on consumers being more frugal and smarter with their money. People are giving us a chance."

What he means is that while Hyundai is selling more interesting cars at comparatively low prices, the company is also reassuring customers with its lengthy warranty programs, countering its long-held reputation as a maker of cheap and unreliable vehicles.

Hyundai's long since moved on from the shoddy days of the Pony, first sold through gas stations when the maker came to Canada a quarter-century ago. Its Genesis was named North American Car of the Year and, so far this year, the Accent and Elantra are Canada's fifth and sixth best-selling cars, behind only the Honda Civic, Toyota Corolla, Mazda3 and Toyota Yaris.

Its sister company Kia is nipping at its heels. Last month was its best sales month ever in the 10 years it's been in Canada, selling 5,200 vehicles.

Between the two of them, Korean cars now account for 10.3 per cent of all light vehicles sold in Canada – more than the European makers, which have 7.9 per cent of the market share.

This isn't worrying Mercedes or Audi, though, which are both very comfortable with what they have. Canadians are cautious with their money, says Marcus Breitschwerdt, president of Mercedes-Benz Canada, and that means more potential for getting customers into his cars.

Premium auto brands are "hardly more than 5 per cent market share in Canada," he says. "The social and economic structure in Canada easily – easily – allows for a market share of 10 to 15 per cent.

"You know, these are tough times because we have to work so hard to successfully serve the customer, but they are also rewarding times because it definitely pays off."

[Jack_Berry]

well let me add i found this on the gm insider site, by accident.

honda will cut production of the pilot and rifgeline at their alliston facility and move them to alabama. honda will increas production of the civic(i guess at alliston) and will also add a n-e-w plant in indiana for further civic production.


do you hear this gm and chrysler?

i just want to publically thank chrysler for taking the money and closing the kenosha wi engine plant and moving production to mexico. HEY CRYCO/FIAT.....if people are not working how can they buy your cars??

[OntarioVanMan]

well let me add i found this on the gm insider site, by accident.

honda will cut production of the pilot and rifgeline at their alliston facility and move them to alabama. honda will increas production of the civic(i guess at alliston) and will also add a n-e-w plant in indiana for further civic production.


do you hear this gm and chrysler?

i just want to publically thank chrysler for taking the money and closing the kenosha wi engine plant and moving production to mexico. HEY CRYCO/FIAT.....if people are not working how can they buy your cars??

That plant in Indiana looks to be close to opening...

How is it the established auto companies are having a problem and these ones are actually expanding?

Because they build what people want and can afford with quality and NO union so they can be flexible...

[chefdennis]

The key is the unions....as for selling what people want, talk to the dealers that are left, they can't keep the suvs and pickups in stock....and the used car market is the same way, suv's and pickup...then look at the Chargers and Challengers and Mustang GT's on the road.....

There is a segment that want those little cars, heck I am looking at a kia sol i like it as a toy, not for taking the family...that will still be something considerably bigger...ive neeb telling my wife she needs to buy a new car soon, before there is nothing but the puddle jumpers...even if it has to be a luxury import, no more GM cars here....if i could get around it and not have to spend an arm and leg, id not buy a GM truck again either...but the deals that can be found on older commerical inventory make those deals hard to pass up...

Congrats to the Canadian auto sales.....

[OntarioVanMan]

Some of them parts must be coming from the U.S suppliers...so Canada's gain is ours as well....in a small way...at this time though any job is a good job...