U.S. automakers (and buyers?) lead January sales to unexpected gains

Jeremy Sinek

When December auto sales posted the only monthly decline of 2015 – amidst a climate of economic negativity – nobody expected much from the January results. Instead, sales surged 9.6 per cent.

The January sales count of almost 109,000 was second only to the all-time record of 110,000 set in 2002. It was also an emphatic 19 per cent higher than the previous 10-year average for January.
 
More striking still, this January’s count was based on two fewer selling days than in January 2015.

Many brands, as well as individual nameplates, reported their best January sales ever.
 
But while more sales are better than fewer, are Canadians really in such a buying frenzy? Or how much of that growth is fuelled by Americans taking advantage of the ailing Canadian dollar?  

DesRosiers Automotive Consultants reported a sharp spike in imports of “used” Canadian cars to the U.S. in 2015 – almost 200,000, up from about 75,000 in 2014.

This cross-border trade “was likely a factor of consideration in the 1.89 million sales record achieved in Canada,” the report concluded.

Since North-American-built cars would be able to enter the U.S. duty-free, was that a factor in Detroit’s strong performance in January?

Despite another incremental increase for FCA Canada (0.6 per cent), strong gains by Ford (14.1 per cent) and GM (24.3 per cent) propelled Detroit’s combined sales up 11.3 per cent while offshore brands grew a more modest 8.3 per cent.

Much more striking was the disparity between cars and light trucks – down 3.8 per cent and up 17.0 per cent respectively. That gave light trucks an unprecedented market share of 68.8 per cent for the month. For FCA Canada, a 43 per cent swoon on the car side meant that a staggering 95 per cent of its sales were light trucks.

No wonder there is talk of FCA abandoning the car business altogether.

The trend to trucks was also highlighted by the Top 10 sellers by model.

It’s nothing new that the top three places were hogged by Detroit’s respective full-size pickups (led by a mile by the Ford F-Series) but it’s also striking that three of the remaining seven were compact CUVs – the Toyota RAV4, Jeep Grand Cherokee and Ford Escape, in that order. And the Nissan Rogue, Honda CR-V and Hyundai Santa Fe Sport lined up in 11 through 13 spots.

Also of note: the Ford Escape, the long-time boss of this segment, slipped to third; the Honda CR-V was bumped out of the Top 10 by the Jeep Cherokee; and the Toyota RAV4 outsold its Corolla sibling.

One passenger car that defied the CUV takeover was the Honda Civic. The all-new-for-2016 model grew its sales a whopping 62 per cent (off an admittedly very weak year-ago month) and jumped into a strong early lead in passenger-car sales.

Another interesting footnote: despite low gas prices and buyers’ mania for trucks, Toyota reported a January record for hybrid sales. Go figure.