Automotive News Canada - April 2024 - 19

* APRIL 2024
19
Luxury sales, Stellantis are outliers in an otherwise up market
CONTINUED FROM PAGE 1
Throwing more water onto the fiery
start to 2024 is that the seasonally adjusted
annual rate (SAAR) also tanked - down to
1.74 million vehicles, the lowest seen over
the past six months. It was above two million
in March.
SALES ANALYSIS
Q1 STATS/P27
DAC called the SAAR " disappointing. "
" For the time being, pent-up
demand continued
to
carry the new
light-vehicle
market as vehicle
availability approached normalization,
although there are increasing
warning signs starting to
appear in the market that are raising
our level of concern, " said DAC
Managing Partner Andrew King.
One of those warning signs is the
luxury market.
DISTURBING DATA
DAC sees " a split developing
between the luxury market, which
is showing distinct signs of weakness,
and the mainstream market,
which is still surfing a wave of
pent-up demand. "
Acura, BMW, Cadillac, Infiniti,
Lexus and Lincoln all saw their
first quarter sales plunge.
" Over the last three or four months, "
luxury-vehicle prices have seen a steady
decline, while luxury automakers have
upped incentive spending, he said. As
well, dealer margins are down, and retail
velocity - the time it takes to sell a vehicle
after it arrives on a lot - has been
slowing.
Karwel didn't have March or first-quarter
data compiled by press time,
but he said the trend in those four
key metrics has been consistent
for months.
Karwel:
Softening
luxury sales
could be
caused by
customers
buying out
their leases
instead of
signing
for a new
vehicle.
FILE PHOTO
Illustrating the problem, Cadillac was
off 21.5 per cent to 2,986 vehicles, but
total General Motors sales were up 3.3
per cent to 63,103 vehicles, according to
the Automotive News Research & Data
Center in Detroit. This was mainly on the
strength of Chevrolet (up five per cent
to 31,419 vehicles) and Buick (up 31.4 per
cent to 4,924 vehicles).
A deeper dive into key data paints an
even uglier picture, said Robert Karwel,
the senior manager of the Canadian automotive
practice at J.D. Power.
" One of them moves in the
wrong direction, well, I'm not
going to worry about it. I'm not
going to dwell on it if two of the
four start going the wrong way, "
he said. " But when three out of
the four start going the wrong
way? I'm like, 'Let's take a look at
this.'
" All four of the four are moving
in the wrong direction now. "
Karwel suspects the luxury
market's dependence on leasing is
a factor.
" I surmise that at some level,
we must have pulled a whole
bunch of people out of leasing, " he
said.
Toward the end of 2023, Karwel
said, it was more economically
smart for a lessee to buy out a lease
instead of opting into a new one because
monthly payments were just too high.
" I think people said, 'I can buy my car
for $33,000, while I see the same car advertised
on the dealer's luxury lot for $50,000,
so I may as well buy it.'
" In October, November, December of
2023, we still had an elevated number of
consumers buying their lease at the end of
the term. "
The market volatility is making for
varying sales forecasts. Scotiabank
Economics said automakers will sell 1.74
Lincoln luxury experience
comes from Lincoln-only staff
CONTINUED FROM PAGE 9
work closely with sales staff to
ensure they hit their goals.
" We did that by isolating a
few needs we felt were important
in the luxury segment and
really tried to understand that
luxury customer . . . is a separate
customer from the [Ford] side, "
she said.
These customers not only
shop for the product, Ruffilli
said, they expect a luxury experience.
That dictated a plan
centred on dedicated staffing,
including in parts and service.
BEYOND BOOMER BUYERS
Courtesy's team also studies
the local market, Ruffilli said.
They recognize that potential
customers exist beyond Lincoln's
traditional baby-boomer demographic,
such as young families,
professionals and, especially,
young women looking for an
upscale compact crossover such
as the Corsair.
" We understood there was a
buyer whom that vehicle was
extremely appealing to, " Ruffilli
said. " If you see our numbers,
that's really where you see a significant
amount of our growth is,
in Corsair. "
About 20 per cent of Courtesy
Ford-Lincoln's customers are
conquests.
" We really don't cannibalize
the Ford side, " Ruffilli said.
Underpinning any market
analysis is Courtesy FordLincoln's
commitment to community
engagement. It serves
a dual purpose of giving back,
through hosting events and aiding
charities, while providing
visibility for Lincoln and boosting
referral business.
" We did a lot of things to
embed ourselves in the community
to really push that product
to a consumer that maybe didn't
even know that it was out there, "
Ruffilli said.
About 85 per cent of Courtesy
Ford-Lincoln's business is leasing,
Ruffilli said. The dealership's
strong relationship with
Ford Credit helped generate a
70-per-cent renewal rate last year
by offering favourable leasing
terms, she said.
" That really does allow us
to maintain loyalty retention
so that we can actively renew
our customer base and allows
us opportunity for growth, "
said Ruffilli, who also chairs
Lincoln's national dealer committee.
" Before
anything and before
volumes is customer experience, "
she said. " That has been
the culture of our store from
inception when my dad started
the business. " - ANC
Sales of the Honda Civic were up 94 per
cent in March and 66 per cent for the
quarter. PHOTO: HONDA
million new vehicles in 2024 while U.S.
forecaster AutoForecast Solutions predicts
1.92 million. For comparison, sales last
year were 1.66 million, according to DAC.
HIGH DEMAND FOR MAINSTREAM VEHICLES
Toyota Canada's new-vehicle sales
surged 28.5 per cent to 57,266 in the first
quarter. That jump, reported April 2,
came a little more than a week after DAC
announced that the automaker sold an
average of 745 new vehicles per dealership
in 2023, up from 709 in 2022.
" This result is a product of everyone
from manufacturing through distribution
to the dealership having a single focus
and a strong partnership, " Cyril Dimitris,
Toyota Canada vice-president of sales and
marketing, said in a statement.
" Toyota Canada's firm belief is that if
you meet the needs of your customers, they
may choose to make you No. 1. "
While the automaker saw overall gains,
Lexus' first-quarter sales fell 9.7 per cent to
6,544 vehicles.
General Motors' 63,103 sales led the market
by volume in the quarter, according
to the Automotive News Research & Data
Center.
Sales of small crossovers were up 66 per
cent, the automaker said.
" We set the pace in 2023, and we're building
on that momentum in 2024, " Shane
Peever, GM Canada's vice-president of
sales, service and marketing, said in a
statement.
" GM Canada continued its sales leadership
into the first quarter and there's more
to look forward to as we roll out a diverse
portfolio of electric and gas-powered vehicles
in the year ahead. "
ACURA DIPS, HONDA SURGES
Honda Canada sales jumped 58.7 per
cent to 30,235 with the Honda brand leading
the way, up 70.3 per cent to 27,579 vehicles.
Acura was down seven
per cent to 2,656 vehicles,
supporting DAC's observation
of a split in the
mainstream and luxury
markets.
Hui: Expects
continued
" very strong "
sales of the
Honda Civic,
up 94 per
cent in March
and 66 per
cent in the
first quarter.
PHOTO:
LINKEDIN
Civic sales were up 94
per cent in March and 66
per cent in the quarter,
the automaker said.
" Previous supply
chain issues had temporarily
affected Civic
inventory early in
2023, " Steve Hui, Honda
Canada's assistant
vice-president of sales
and marketing, said in a
statement.
" Since then, and
having the benefit of
local manufacturing in
Canada, sales for the . . .
Civic have returned and been very strong.
We expect that trend to continue in 2024
with the introduction of the Civic Hybrid
this summer. "
Not everyone was a winner. Sales for
Stellantis, typically one of the biggest sellers
by volume in Canada, dropped 20 per
cent. Every one of its mainstream brands
was down. Jeep fell 12 per cent, Dodge 13
per cent, Ram 24 per cent and Chrysler 31
per cent. Sales of the low-volume brand
Alfa Romeo were up 32 per cent. -ANC
Quarter-Page CANADA Auto News Ad for APRIL 2024 publication - (Due MAR. 20)
Knowing How To Handle 'PRICE' Is Critical
Check out Joe's online course
" How To Handle PRICE " on JVTN®
How To Handle
'PRICE'
Your team will develop
skills to handle tough price
questions, close more deals,
and learn to negotiate with a
better set of tools...
CALL US TODAY (888) 700-9454
JoeVerde.com/CA36
Joe Verde Sales & Management Training, Inc.
031924
SC 13120
https://www.joeverde.com/Video-Joe-Verde-Canada-Automotive-News-Price-Handling-Objections.html?sc=13120
Automotive News Canada - April 2024

Table of Contents for the Digital Edition of Automotive News Canada - April 2024
