But in the current economic climate that’s a good result
By the time you read this magazine, 2011 will be history and you’ll know the final sales figures for the year. Or, if you don’t, you can find them at www.canadianautodealer.ca. As we write this column, however, there’s still more than a month remaining before we usher in 2012. So there’s also some conjecture in trying to summarize the sales results for the year.
Nevertheless, there are things we know for sure and others we can reasonably infer. Barring some further politico-economic crisis or climatic force majeure between now and then, new vehicle sales should total just short of 1.6 million — or even reach that figure if November and December should catch a tail-wind.
While that’s far from a record, it’s not a bad result either. Only four years ever have yielded more new-vehicle sales, and 2011’s sales total is marginally above the average for the past five years.
So, as a whole, it wasn’t a great year but probably the best we could expect — particularly considering the overall state of the economy, which was, at best, “uncertain” throughout the year. It could have been much worse.
Outside influences tilt results
It wasn’t just the impact of the uncertain economic climate that put a damper on sales, countering almost every monthly gain with a downturn the following month.
Perhaps the greatest contributors to what became a reshuffled market in 2011 were the Japanese earthquake and tsunami in March, which had dramatic and long-lasting impacts on the supply side. And those effects were exacerbated by flooding in Thailand in October.
While some automakers were harder hit than others by those disasters, the net effect can be seen in the overall market share captured by Japanese brands. Through October, it had fallen to 30.2 per cent from a high of 37.9 per cent in 2009.
Offsetting that downturn, over the same period, the Detroit Three’s market share improved by 1.5 per cent (to 47.7%), while the Koreans gained 1.6 per cent (to 12.7%) and the Europeans advanced by 0.7 per cent (to 9.4%).
The Korean duo, Kia and Hyundai, if considered as a single company (which they are), are now the fourth largest in terms of Canadian sales, behind the Detroit Three and ahead of Toyota/Lexus/Scion.
Supply constraints on the Japanese side undoubtedly played a role in that market shift. But it can be argued that they may have just accelerated a trend that had already begun.
Detroit Three share was on a steady decline through 2009. But an upswing had already begun in 2010; and it continued in 2011.
Similarly, the shares of both the Europeans and the Koreans had been steadily increasing over at least the last six years. So 2011 just brought more of the same.
Product rules
The messages in these figures would seem to be clear. Brand loyalty is no longer as strong as it once was. Customers are willing to forego past allegiances and prejudices when presented with what they perceive to be compelling alternatives. And product still rules, along with value.
Kia, Hyundai and Volkswagen are valid cases in point. They’re the shooting stars in the mainstream market these days. And they’ve achieved that status on the basis of good product at good prices. Some Detroit Three models — the ones selling well — also fit that description.
It’s no accident that the Koreans claimed five of 11 category awards in the 2012 AJAC (Automobile Journalists Association of Canada) Canadian Car of the Year Awards program. Or that VW took two of the remaining awards. Nor is it surprising that some of last year’s winners, including the Chevrolet Cruze and Ford Fiesta, are setting sales records.
If you look at sales results broken down to the model level, it’s apparent that the hottest vehicles in the market are the newest. Not just in name but in terms of both styling and content.
Indeed, there seems to be some similarity with the halcyon days of the horsepower wars — which reached their zenith in the 1950s and 1960s. Except that now horsepower has been replaced by feature content. Everything from safety features to onboard consumer electronics. Especially consumer electronics.
All of which makes for the most competitive marketplace we’ve been in for years — perhaps ever. The return of more normal supply capabilities for the Japanese automakers will only make 2012 more so. Bring it on!
