January sales kick off 2018 at record pace

If the pace of new-vehicle sales in Canada is set to moderate in 2018, as has been widely predicted, the market has yet to get the message. After two consecutive months of declines, January sales bounced back to set an all-time record for the month, with 117,308 vehicles sold, a 5.7% increase from January 2017 and 15% ahead of the five-year average for the month.

“Despite the Conference Board of Canada reporting lower levels of consumer confidence in January — which usually translates into lower purchases of high ticket consumer products – auto sales bucked that trend in a big way in January,” said David Adams, president of the Global Automakers of Canada.

“Significant other uncertainties like the fate of the NAFTA and the broader geo-political situation, seemed to have left automotive consumers unfazed,” he added.

Supporting the new sales record for the month, January’s SAAR (Seasonally Adjusted Annualized Sales Rate) topped 2.1-million, according to DesRosiers Automotive Consultants (DAC). But January is not the best month to reveal market trends, Dennis DesRosiers cautioned. “There is a lot of gaming at the end of the year that can warp January sales.”

In addition, DesRosiers observed, speculation about increasing interest rates might have rushed some buyers into the market to lock in a low interest rate. “There are as many positive variables as negative variables affecting vehicle sales right now, so it is hard to predict where the market will be in 2018,” he concluded.

“The safest bet,” he suggested, “would be a minor correction, although it wouldn’t surprise us if we end up with another record year in 2018.

Turmoil at the top

As seems to have become a habit, Fiat Chrysler Automobiles (FCA) claimed sales leadership for the first month of the year — the fourth consecutive year it has done so, although only once in that period (2015) has it maintained that position at year-end.

In site of being the top seller, FCA’s 17,761 sales were down 3.7% from a year ago, however, giving up 1.5% of market share, which dropped to 15.1%.

General Motors maintained its recent momentum with 16,791 vehicles sold — the only one of the Detroit Three to post a sales gain with a 15.0% increase. In doing so, GM edged out Ford for second place and improved market share by 1.1% from a year ago to 14.3%.

That performance relegated calendar-year 2017’s sales leader, Ford to third place with 16,461 units sold — a decline of 4.4% from a year ago and a loss of 1.5% in market share, to 14.0%.

To put those market share figures in perspective, Ford finished 2017 with an annualized market share of 15.1%, GM 14.9% and FCA 13.1%.

Collectively, the Detroit Three claimed 43.5% of the market in January, down by 1.8% from a year ago but up four-tenths from their 2017 full-year results.

Honda overtakes Toyota

Perhaps the biggest surprise in January’s results is Honda’s surge into fourth place with 12,007 sales — a dramatic 31.5% increase that boosted market share by an industry-leading 2.0%, to 10.2%.

As a result, Toyota dropped to fifth place in the rankings, in spite of a 2.8% increase in sales to 11,168. Amongst higher overall sales, its market share dropped by 0.3% to 9.5%.

Nissan, which had jumped into fifth place for December, fell back to its usual sixth-place ranking, with sales of 8,017 vehicles up 5.3% and its 6.8% market share down by 0.1%.

Hyundai maintained its seventh-place position, in spite of an 11.6% sales decline to 5,200 units and a 0.9% drop in share to 4.4%.

But the top-twelve rankings shuffled from there down, as Mazda claimed eighth place with a 10.2% sales increase, to 4,416 units, and a 0.2% share increase to 3.8%.

Close behind, Volkswagen’s sales soared by 42.8%, to 4,327, bumping VW’s market share a fill percentage point to 3.7%.

Tenth place for the month belonged to the luxury-class leader, Mercedes-Benz, in spite of a 4.6% sales decline and a 0.4% share drop, to 3.0%.

All those changes, along with a 5.2% drop in Kia’s sales to 3,253, relegated the Korean brand to 11th place. Its market share also declined, by 0.3% to 2.8%.

That left Subaru in 12th place with 3,221 sales, barely behind Kia, even though that figure was up 14.8% from a year ago, boosting share by 0.2% to 2.7%.

Just how predictive these rankings will be for the rest of the year remains to be seen.

Winners and losers

On a percentage basis, the biggest winner in January was Volvo with an 45.4% increase, followed by Volkswagen (+45.4%), Audi (+17.9%), Genesis (+36.4%) and Honda (+31.5 %).

While several brands failed to match the market average, those whose sales actually declined were: FCA (-3.7%), Ford (-4.4%); Kia (-5.2%); Mercedes-Benz (-4.6%); Maserati (-5.7%); and Hyundai (-11.6%).

Light truck sales, which include SUVs, increased by 9.1% to 85,906 vehicles, accounting for 73.2% market share. Passenger car sales declined by 2.5% to 34,102 units, just 26.8% of the market.

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