National Post (National Edition)
AUTO SALES IN CANADA, U.S. ON PACE FOR RECORD.
NOVEMBER NUMBERS SLAM THE BRAKES ON TALK OF SLOWDOWN
TORONTO • Reports of the auto industry’s decline appear to have been greatly exaggerated.
Sales in both Canada and the U.S. continued to rise in November, with double-digit gains at several automakers driven by Black Friday deals and other consumer incentives.
November sales were somewhat distorted because the month had two extra selling days compared to a year earlier. Still, the gains were enough to send shares of General Motors Co. and Ford Motor Co. soaring Thursday, gaining 5.5 per cent and 3.9 per cent, respectively, in U.S. trading
Canadian light-vehicle sales jumped 10.4 per cent in November to 160,573, the first monthly gain since June, according to data compiled by DesRosiers Automotive Consultants Inc.
“For those claiming that 2016 had run out of steam, November 2016 light-vehicle sales showed a different picture altogether,” DesRosiers wrote in a note. “Last year, total vehicle sales stopped just short of 1.9 million vehicles sold. As the market is currently up three per cent year-to-date, this record is basically sure to be broken.”
Sales at GM Canada soared 31 per cent to 28,523 vehicles, its best November since 2006.
“November was an outstanding month for sales of cars, truck, crossovers and electric vehicles to consumers in all regions of Canada,” John Roth, vice-president of sales, service and marketing, said in a statement.
However, GM Canada’s sales were down 8.8 per cent in October and are only up two per cent year-to-date.
Ford Canada’s sales jumped 18.3 per cent in November, led by a 37 per cent increase in F-Series pickup trucks. Toyota Canada’s sales rose 4.2 per cent, including a remarkable 102-per-cent gain in hybrid sales.
Bucking the trend, Fiat Chrysler Canada’s sales slipped 1.7 per cent.
Several analysts believe North American auto sales have plateaued after several years of gains. This had been putting pressure on automakers’ stocks, although they have rallied since the U.S. election on optimism that president-elect Donald Trump will cut corporate taxes and implement less stringent emissions rules.
Analysts at Macquarie, which initiated coverage of GM and Ford this week, said that even if the U.S. market has peaked, it’s too soon to say the industry is in a downturn.
“Considering that the U.S. should plateau at a high level, and growth in other regions of the world should more than offset U.S. decline, we believe that it is too soon to call that the auto industry has entered a cyclical downturn,” Takuo Katayama and Matthew Prisco wrote in a note to clients.
Macquarie gave GM an outperform rating with a US$44 price target and Ford a neutral rating with a US$13 price target, saying both are attractive investments, particularly if investors are willing to wait for stock-price gains.
South of the border, total light-vehicle sales increased 3.7 per cent to a seasonally adjusted annual sales rate of 17.9 million vehicles, indicating that 2016 could set a new sales record.
GM’s U.S. sales rose 10.2 per cent and Ford’s sales climbed 5.1 per cent. Fiat Chrysler Automobiles NV sales plunged 14 per cent, including a 12 per cent drop in sales of the popular Jeep brand.