Automotive News Canada - April 2023 - 27

* APRIL 2023
27
Interest rates could clip sales momentum
CONTINUED FROM PAGE 1
publicly reports by quarter. Ford
Canada did not provide a reason
to Automotive News Canada by
deadline and multiple messages
to Mark Truby, chief communications
officer
of Ford's global
public-relations
department, were
unanswered. Ford
Q1 STATS
P30-31
Canada said it will provide fullyear
results in early 2024.
Some analysts warn that
although the total numbers look
good, they're being compared
with a period that was marred
by COVID-19, a global microchip
shortage and an inventory
crunch. Meanwhile, other analysts
warn that new bumps dot
the road to full recovery.
General Motors performed the
best among the reporting mainstream
global automakers during
the first quarter, with sales up
28.1 per cent to 61,093. But while
Sandor Piszar, vice-president,
sales, service and marketing at
GM Canada, is elated by the company's
performance, he said it
needs to be taken in stride.
" Obviously you need to take
into consideration what the conditions
were in 2022 first quarter, "
Piszar said. " There were a
lot of ... problems, so year-overyear
comparison you have to
look at it in that context.
" That said, we are trending
ahead of our competitors in the
industry. GM Canada saw strong
customer demand this quarter
across our entire portfolio, " he
said.
Buick sales were up a whopping
143 per cent to lead all GM
brands. Chevrolet increased 27.5
per cent, Cadillac 24.8 per cent
and GMC 20.3 per cent.
Even despite rising interest
rates and with some of the clouds
on the economic horizon, Piszar
insists demand for new vehicles
of all types persists.
" Certainly, there are concerns
from customers when it comes
to the outlook for the economy, "
he said, " but we believe there is
more demand than supply for the
Canadian auto industry. There
is still strong demand for cars,
trucks and SUVs. We're seeing
that in our showrooms. "
'LACK OF MOMENTUM'
Although the industry has
managed to string together
five consecutive months of
gains, " There is a decided lack
of momentum, and the gain in
March was less than we saw in
for Honda. " The degree to which
different vehicle companies were
able to obtain inventory
varied dramatically
from one player
to another, " said
DAC about the disparities.
Inventory
has
turned the corner
at GM, Piszar said.
" We've been working
with our dealers
to overcome a lot of
challenges, certainly
inventory being the
key one, " he said.
But Piszar doesn't
want too much of a
good thing.
Certainly, there
are concerns
from customers
when it comes
to the outlook
for the economy,
but we believe
there is more
demand than
supply for the
Canadian auto
industry. "
Sandor Piszar
Vice-president, sales, service
and marketing, GM Canada
January and February, " said
DAC Managing Partner Andrew
King.
Two new surveys released
in April by the Bank of Canada
found that consumers expect to
slow their spending, while businesses
have a subdued sales
outlook. However, respondents
of one of the surveys - the
Canadian Survey of Consumer
Expectations - think inflation
will slow for gasoline and vehicles.
The
DAC news release called
the inventory recovery " uneven
and unequal. ... This was clearly
seen in the quarterly performance
figures. "
Quarterly sales changes
among large-volume brands varied
from an increase of 38.1 per
cent for Kia to a 25.8-per-cent dive
" We certainly
don't want to be in
an overbuild situation
and go back
to the old days of
having to put large
incentives on vehicles
to move them. "
INVENTORY LESSONS
The COVID-19
pandemic offered
valuable lessons,
Piszar said.
Q1 NOTABLES
TOP SALES INCREASE BY
PERCENTAGE (MORE THAN
100 VEHICLES SOLD IN Q1)
BMW i4 + 555%
the Bank of Canada began raising
rates in 2021, Karwel said.
Rates are down to
about 6.29 per cent
from 6.99 per cent,
depending on the
length of the loan, he
said.
Nissan Armada +552%
Subaru WRX +543%
Kia Carnival +316%
VW Jetta +284%
BIGGEST SALES LOSSES BY
PERCENTAGE (MORE THAN
100 VEHICLES SOLD IN Q1)
Toyota Venza -79%
Toyota Prius -78%
Honda Accord -76%
Nissan Qashqai -76%
Toyota Sienna -74%
BRAND UPS AND DOWNS
Buick +143%
Maserati +89,9%
Genesis +52.5%
Fiat -44.4%
Chrysler -39.3%
Honda -25.8%
" OEMs are realizing
that the monthly
payment is getting
very high, so they
provided some APR
relief, but not much.
It's a sign that in the
current high-interest-rate
environment,
there might be more
aggressive APR reductions
coming, but only
for certain brands, "
he said.
The average monthly
car payment in
Canada now stands at
$880, Karwel said, a
figure encompassing
all captive and bank
loans and leasing.
That's up $120 from
a year ago. Eighteen
brands now have a
total average month " We
learned we can operate
with a much lower level of inventory.
Dealers learned they didn't
need to have a packed lot to sell
from. Consumers have changed
their mindset in terms of timelines
and acquiring a vehicle and
waiting for a vehicle they're looking
for. "
No one, Piszar said, wants to
return to the days of " just cranking
numbers out of the plants
and having to push them on the
public. We've been very measured
in our
approach, and
we've been very
measured in our
incentives. "
Karwel:
Incentives
are rising
but are
" a far cry
from " 2020
levels.
FILE PHOTO
He did not disclose
financial
details of GM
Canada's incentive
spending.
" Incentives
climbed last
month, with
a fair amount
of strength, to
$4,500 [per vehicle], "
said Robert
Karwel, senior
manager of J.D. Power Canada's
Power Information Network.
" But that's still a far cry from the
$6,000-plus we saw in 2020. "
Some automakers' captive
lenders are dropping their interest
rates for the first time since
ly finance payment of more than
$1,000, he said.
BETTER DAYS FOR CHIPS?
Meanwhile, Piszar expects GM
" to win even more customers
this year as we launch more electric
vehicles. "
However, those expectations
come with a caveat, said Brian
Kingston, head of the Canadian
Vehicle Manufacturers'
Association (CVMA), which
represents the interests of the
Detroit Three in Canada. While
inventory levels are increasing
and the chip shortage receding,
nothing is for certain.
The chip situation " appears to
be getting better, " but it's " still
out there, " Kingston said.
" The expectation is that it
should be largely eased by the
end of this year.
" The big caveat, of course, is
that we've seen similar forecasts
the past couple
years around the
potential end of
this chip shortage.
But I think
it's looking positive
that we're
coming toward
a more balanced
global chip market, "
he said.
Potential
remains for
other shortages
and a run-up
in demand for
critical minerals
as the industry
continues
its shift toward
Kingston:
" We might
see some
bumps
along the
way as we
get to fully
electrified
fleets. "
FILE PHOTO
electrification, Kingston said.
" Effectively, a new supply is
being created right now, and
with that will come challenges. "
New content rules for electric
vehicles and their batteries -
embedded in the U.S. Inflation
Reduction Act - also could
affect inventory as automakers
rush to build more EVs in North
America, Kingston said. " We
might see some bumps along the
way as we get to fully electrified
fleets. "
As for monthly sales, DAC said
March was up 3.7 per cent from a
year earlier and that automakers
overall sold an estimated 146,000
light vehicles.
The seasonally adjusted annual
rate of sales for March came in
at 1.59 million units, DAC said,
notably lower than the first two
months of the year, where it hovered
around 1.7 million. - ANC
PERSPECTIVE ON COMPARING QUARTERS
First-quarter sales of 348,000 vehicles, estimated by DesRosiers
Automotive Consultants, is an improvement over year-ago numbers of
330,593, but it pales significantly to the first quarter of 2021, a full year
after the beginning of the COVID-19 pandemic. Note that the chart numbers
below from Automotive News Research & Data Center differ from
DesRosiers' because of the brands counted.
Q1 Q2 Q3
Q4 Total
Change
2022 336,960 431,783 393,906 351,816 1,514,465 -8.8%
2021 384,226 482,746 446,132 347,310 1,660,414 6.9%
2020 332,456 319,259 505,190 396,631 1,553,536 -20.0%
2019 418,555 575,343 528,327 420,492 1,942,717
Source: The Automotive News Research & Data Center
Magna says class-action suit is 'riddled' with factual errors
CONTINUED FROM PAGE 3
would allow them to maximize their profits, "
reads the statement of claim.
Toronto law firm Diamond and
Diamond issued a news release March 31
announcing the lawsuit. The same day,
Magna issued a statement denying the
charges.
" Their claims are without merit, and
we will contest them vigorously, " the
Magna statement says. " In fact, this claim
is riddled with multiple factual errors,
misidentified parties and easily identifiable
mistakes. "
Magna's statement says the company
has " been proactively and voluntarily
supporting the Canadian Border
Services Agency (CBSA) and other applicable
authorities in their efforts to identify
abuses related to illegal migrant labour
practices in Ontario. "
" As part of this effort, we have been
assured by CBSA that Magna is not under
investigation. "
The Canada Border Services Agency
would neither confirm the existence of
such an investigation nor Magna's claim
of absolution.
" Human trafficking is a reprehensible
crime, and we are proud to represent the
brave victims in this lawsuit, " Sandra
Zisckind, Diamond and Diamond managing
partner, said in a news release. " Our
goal is to ensure that these corporations
are held accountable for their actions and
that justice is served for the survivors of
this horrific crime. "
Magna's statement suggests it might
not stop at simply defending against the
accusation.
" We are currently exploring any and
all options to defend against these incorrect
assertions, including potential claims
against Diamond and Diamond for their
irresponsible statements in the media
release, " the Magna statement says.
Magna International describes itself
as a mobility technology company and
employs more than 168,000 staff in 343
manufacturing and 88 product development
centres in 29 countries. - ANC
Automotive News Canada - April 2023

Table of Contents for the Digital Edition of Automotive News Canada - April 2023
