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Viewing report
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Canada Autos Report Q4 2011
Business Monitor International, Sep 2011, Pages: 38
Based on Canada's vehicle sales results for the year so far and potential supply issues for the country's best-selling car, we revised our sales forecasts downwards at the end of May, to show passenger car sales ending the year down by around 2%. Results for August and the first eight months combined are in line with this view. Passenger car sales fell 0.1% y-o-y in July, leaving segment sales for 8M11 down 1.6% yo- y. On the other hand, light truck sales have rebounded, with sales up 5.8% in August and 4.6% in 8M11. We have raised our forecast for light trucks given the strength of the rebound in recent months, although, given the traditional pattern for sales to slow down in the latter months of the year, we project growth of 2.5% by the end of the year.
We have also lowered our 2011 passenger car and light vehicle output growth forecast this quarter to 2% and 1.5% respectively, on the back of lower than expected demand both on the domestic and US markets. Our forecast for heavy truck production, on the other hand, has been raised in line with rapid sales growth. We believe there will be more opportunity for stable output growth over the remainder of the forecast period, particularly as the government of Ontario is stepping up incentives to encourage more vehicle production projects in the alternative fuel field.
The latest loan awards cover all aspects of the industry, from training to parts and vehicle production. Ontario was particularly hard hit in all segments during the auto industry slowdown and global financial crisis and has been working to recover the thousands of jobs lost in the industry. In July 2011, the EMDT said the auto sector had added 8,200 new jobs since June 2009 and has recovered around 96% of the jobs lost during the recession. The industry has also started to recover its vehicle output volumes, with production rising 38.75% in 2010, although this was largely due to the low base of 2009 when output fell 28% and dropped below 2mn units for the first time since the beginning of BMI data in 1997.
Despite the switch away from passenger cars in the latter months of the January-August period, Kia Motors continues to be one of the strongest brands in terms of sales growth. Only Porsche reported higher y-o-y growth in the eight-month period, with sales up 30.8% compared with 20.5% for Kia. The South Korean brand has also raised its market share from 3.5% at the end of 2010, to 4.2% as of August 2011. While Ford continues to lead the market, with stable growth of 5.2% over the eight months, the biggest gain among the Detroit Three came from Chrysler, which increased its sales by 13.6% y-o-y and expanded its market share from 13.1% at the end of 2010 to 14.9% for 8M11. It will look to add to this performance with the addition of the 2012 Ram Cargo Van, which entered production in late August.
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