Automotive News Canada - July 2019 - v2 - 23

* JULY 2019

No direct indication that legal drama
has made Bigland ineffective at work
CONTINUED FROM PA GE 3

around you," DesRosiers said. "He's not necessarily doing all the work. Buckingham is doing
more in Canada and has had to take on more
responsibility, as has the team around him."
Bigland, a native of Kamloops, B.C., filed
his lawsuit in the United States, alleging FCA
was withholding 90 per cent of his pay in retaliated for his participation in a U.S. Securities
and Exchange Commission investigation into
the company's sales reporting and his decision
to sell all of his FCA stock. The complaint portrays Bigland as a scapegoat for sales practices
that were changed in July 2016, when the company admitted that a 75-month streak of yearover-year gains in the United States had actually ended three years earlier. Bigland became
head of U.S. sales in April 2010, about a year
after that streak began.
FCA, however, argued in a July 8 court filing that Bigland doesn't merit whistleblower
protections, claiming that his compensation
was slashed because he is implicated in the
federal probe not because he cooperated with
investigators.
Michael Wyant, COO at the Wyant Group
in Saskatchewan, said he hasn't noticed any
differences in FCA Canada's dealer relations
since news of Bigland's suit broke.
"Nothing's changed on our end yet."
Bigland is based in FCA's U.S. headquarters in Auburn Hills, Mich., about 70 kilometres north of FCA Canada's main offices in
Windsor, Ont. Distance, as well as his numerous roles with the automaker, have likely required Bigland to delegate many of his

responsibilities, DesRosiers said.
"I've never seen Canada run outside of
Canada," DesRosiers said. "Reid is technically still head of FCA Canada, but that's a first.
Every Canadian company has always had
somebody proactive in the country. I've also
never run across an executive being investigated by the [government] in the U.S. relative to
their sales numbers."
The uncertainty surrounding Bigland
comes as FCA deals with plummeting sales in
Canada, down 13 per cent through the first six
months of 2019, compared with the same
period a year earlier. That follows a
16-per-cent drop in 2018.
In the United States, FCA's sales are down
1.7 per cent this year through June.
DesRosiers said FCA Canada's numbers are
"hard to explain," considering Jeep models
selling in the utility segment and the strength
of Ram pickups. He said FCA, under late CEO
Sergio Marchionne, was among the first to recognize the market shift away from cars toward
light trucks. But other automakers have
caught up, and many of FCA's vehicles are
"getting long in the tooth," he said.
"It's possibly the toughest segment to compete in, and it's a moving target and it's changing very rapidly.
"Perhaps this comes back to the resources. Do they have the resources to keep up with
what everybody else has in that segment? To
tell you the truth, I don't really know. From the
outside, it appears that they could use more."
- ANC
- Automotive News reporter Vince Bond Jr.
contributed to this report.

How much less is less vehicle ownership?
CONTINUED FROM PA GE 1

their cores.
"Clearly, you are going to
see different forms of shared
mobility, which can have
some impact on the traditional, direct retail business
in urban settings and maybe
more of a shift away from that
direct ownership in certain
cases," White said.
Some of the world's biggest
cities have already enacted
measures aimed at discouraging people from driving
into city cores, and more are
expected to do so as congestion increases and as governments look to reduce carbon
emissions.
The future of vehicle ownership was a key topic of discussion at a recent high-tech
conference in Toronto.
"There's a huge demographic that has a family, that
has kids, that has car seats
and all the things you need to
put in the car. These things
are going to push you into the
convenience of owning a vehicle," said Andre Haddad, CEO
of peer-to-peer car-rental service Turo.
"But we definitely see the
younger demographics and
the older demographics having the possibility of being
freed up from car ownership
because of all the transportation networks that are going
to be out there."
Michael DeFreitas, general
manager of Lockwood Kia in
Oakville, Ont., near Toronto,
said he largely anticipates
most Canadians will continue

Sidewalk Labs' plan for
a portion of Toronto's
waterfront is a
pedestrian-friendly
neighbourhood, which
means reducing vehicle
ownership, which means
reducing traffic in
dealerships.
P H O TO : S I D E WA L K L A B S

to want to own their own vehicles, even as new technologies
emerge.
"I don't think the business
is going to change to that kind
of model. People still want to
own their own vehicle and
people still need to have transportation outside of the city,"
he said. "At the end of the
day, owning a vehicle is still a
point of pride for people."
Sidewalk, owned by Google
parent Alphabet Inc., in June
revealed its $1.3-billion plan
for a 12-acre (4.8-hectare) district on Toronto's waterfront
near the downtown core. Part
of the plan focuses on how
mobility, transit, ride-hailing
services and self-driving vehicles can be used to make cities
more pedestrian-friendly.
Sidewalk sees reducing
vehicle ownership as critical.
"If self-driving vehicles are
individually owned and free
to roam the streets without

a driver, then car ownership
- and congestion - might
soar," the plan reads. "But if
self-driving vehicles are integrated into the urban environment and public transit network with thoughtful policies
that encourage fleets of shared
trips and people-first street
designs, they can become part
of a next-generation mobility
system."
Sidewalk's warning about
traffic congestion is notable coming from a company
that sees self-driving vehicles as crucial to achieving its
long-term goal of creating a
so-called "smart city."
"Self-driving vehicles could
become both widely available and demonstrably safer
than today's drivers over the
next 15 years," the plan reads.
"Their ability to operate as
fleets or shared services could
enable cities to recapture most
of the street space once devoted to parking and to repurpose this space for bike lanes,
wider sidewalks, transit services, or pickups and dropoffs
that would make it easier to
live comfortably in the city
without owning a car."
In its report, Sidewalk
acknowledged that personal
vehicle ownership "will persist" in the coming years even
if self-driving tech "radically lowers the cost of hailed
rides." That's because "owning a car in a major city is not
a decision based on a detailed
cost-benefit calculation," the
plan reads. "Thus, policy will
need to shape car ownership
patterns." - ANC

June sales mark
16-month slide
But transaction
prices up, profits
healthy, say analysts
By GREG LAYSON

D I G I TA L A N D M O B I L E E D I T O R

JUNE SHOULD HAVE BEEN
a better sales month, say
experts. It should have been
the month that snapped the losing streak, which now stands at
16 consecutive months of yearover-year declines.
Carbon-tax rebates arrived in
households across Canada, the
weather finally broke, and June
is typically one of the more popular months to buy a car. Except
this year, it wasn't.
Sales tumbled 9.5 per cent -
to 182,270 vehicles - compared
with the same month last year,
according to the Automotive
News Data Center in Detroit. It
was the biggest year-over-year
decline during the 16-month tailspin. And now, at the halfway
point of 2019, sales are down 5.3
per cent to 984,627 with hopes
of hitting two million in annual
sales all but dashed.
Scotiabank Economics now
forecasts annual sales of 1.94
million units for 2019, below the
1.98 million sold in 2018 and the
record 2.04 million for 2017.
Canadian auto sales "are
well into a cyclical slowdown,"
Scotiabank Economics warned
in its Auto News Flash on July
3.
"Despite relatively supportive conditions in May and June
(e.g., decent weather, unexpected tax refunds, exceptionally
strong job growth), auto purchases continue to disappoint,"
the report read.
Rebekah Young, Scotiabank
Economics' director of fiscal
and provincial economics, said
June's numbers "were a bit of a
surprise."
"I had honestly thought we'd
have a flat sales month. I felt we
had pent-up demand."
Still, it's not all bad news.
Both Young and J.D. Power
Canada's Robert Karwel said
the industry remains profitable

MOVERS & SHAKERS
Compared with the
same month a year ago
Nissan Kicks +146%
Porsche Cayenne +130%
Ford Mustang +72%
Chevrolet Impala +33%
Dodge Grand Caravan +14%
Ford Focus -89%
Dodge Journey -83%
Nissan Maxima -76%
Volkswagen Passat -78%
Ford Explorer -63%

FULL OF SURPRISES
Lexus ES +233%
Ford Fiesta +163%
Mercedes G class +152%
Chevrolet Silverado -46%
GMC Sierra -44%
Honda Civic -47%

Ram was one of the few
brands to post sales growth
in June: 6.8 per cent.
PHOTO: FCA

despite slumping volume.
Automakers are looking at
margins, Young said.
"Consumers . . . might be buying fewer vehicles, but they're
buying more expensive vehicles."
Karwel, senior manager at
J.D. Power's Power Information
Network, Automotive Division,
said for the first time in history, the average vehicle price in
Canada has been above $40,000
in each of the first six months
of a year. And the transaction price has hovered around
$35,000-$36,000 depending on
incentive spending.
"If transaction price and
vehicle price move in lockstep and remain where they
are, that's a pretty heady mix,"
Karwel said. "Canadians are
spending more on vehicles than
they ever have before. People
are buying a very rich mix of
vehicles, and you can't complain
about that."
Automakers continue to pull
back on incentives, too.
"Clearly automakers are
more concerned with profit rather than volume," Karwel said.
Stronger economic growth
in the second half of the year,
along with lower monthly sales
numbers from late 2018, should
reinforce modest sales growth
for the remainder of the year,
Scotiabank says.
"A good year would be if we
could just hold the line on the
trajectory we're on now," Young
said. "A good year would be finishing there [at 1.94 million]."
J.D. Power Canada said car
sales fell by about 21 per cent
in June, but truck sales, which
include crossovers and utility
vehicles, were down just one per
cent in June over last year.
"They are accelerating transaction-price growth," Karwel
said of trucks. "We're in a cyclical downturn, but people keep
buying a richer mix of vehicle.
You have to take the good with
the bad. And considering we're
down, I would be pretty happy
with these numbers."
When it came to individual
automakers, sales were down
across the board.
Unlike recent months, during
which a single automaker managed to drag down the monthly
overall sales total, every major
automaker from Detroit to
Japan posted declines.
On a brand basis, Ram and
low-volume seller Cadillac were
the only two major nameplates
that posted sales increases, up
6.8 and 10.2 per cent, respectively. Porsche and Volvo and a few
ultraluxury brands were also up
slightly. - ANC

Automotive News Canada - July 2019 - v2

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