Auto sales set record in May, gain 11.2 per cent vs. 2016

RICHMOND HILL, Ont. (CP) — DesRosiers Automotive Consultants says Canadian auto sales set a monthly record in May, gaining 11.2 per cent year-over-year.

The consulting firm says vehicle sales for the month totalled 216,861 including 75,172 cars and 141,689 light trucks, topping the previous record set in April 2016.That result compared with total sales of 194,934, including 73,079 cars and 121,855 light trucks, in May 2016.

Ford led the way with 34,475 sales last month, up 17.4 per cent from a year ago, while FCA was second with 33,186, up 4.6 per cent. General Motors sold 31,149, up 35.8 per cent compared with May last year. Toyota sales totalled 21,611, up 7.4 per cent from a year ago.

Investors pick Tesla’s promise over GM’s steady profits

DETROIT (AP) — When General Motors CEO Mary Barra introduced the Chevrolet Bolt at the CES gadget show last year, she took a shot at Tesla.

Buyers can be confident because Chevy has 3,000 U.S. dealers to service the new electric vehicle, she said. The implication was that Tesla, with just 69 service centres nationwide, can make no such promise.The uncharacteristic insult from Barra was designed to highlight the difference between 108-year-old GM and Tesla, a disruptive teenager. It also acknowledged a budding rivalry that could help determine whether Detroit or Silicon Valley sets the course for the future of the auto industry.

The tale of the tape favours GM. It has made billions in profits since returning to the public markets in 2010. GM got the Bolt, a $36,000 car that goes 238 miles per charge, to market before Tesla’s Model 3. Tesla, the 14-year-old company led by flamboyant CEO Elon Musk, has never posted an annual profit.Yet, as both CEOs face shareholders for annual meetings on Tuesday, it is Barra who must explain to skeptical investors why GM’s future is as bright as Tesla’s.

GM’s stock is trading around the $33 price of its initial public offering seven years ago. During that time, Tesla shares have soared more than tenfold to $335. Wall Street now values Tesla at about $55 billion, compared to around $50 billion for GM.

Despite efforts to paint themselves as technology companies, automakers can’t shake their giant, capital-intensive global manufacturing operations. The huge investment needed to build vehicles yields low profit margins compared with tech companies that make software or cellphones, says Michael Ramsey, an analyst with Gartner. GM’s net profit margin in 2016 was 5.7 per cent. By comparison, Alphabet Inc., parent of Google, had a 22 per cent margin.

Tesla’s electric cars are the envy of the industry, and its semi-autonomous technology is among the most advanced on the road. Musk says Tesla’s California assembly plant— which used to be GM’s — will soon be among the most efficient in the world. And it’s branching into areas with potential for bigger returns, including solar panels, energy storage and trucking.