Business

Gas prices drive fuel-efficient car sales

Higher gasoline prices drove consumers toward more fuel-efficient choices but not out of the new vehicle market in Canada last month as many automakers reported improved and even record-breaking sales.

Ford leads Canada sales

An employee advances a 2012 Ford Focus on the assembly line at a Ford plant in Wayne, Mich., in March. Canadian and U.S. automakers released April sales numbers Tuesday. (Paul Sancya/Associated Press )

Higher gasoline prices drove consumers toward more fuel-efficient choices but not out of the new vehicle market in Canada last month as many automakers reported improved and even record-breaking sales. 

Overall car sales were up eight per cent to 75,680 in April from 70,061 in the same month last year. Truck sales grew at a slightly slower pace, up 5.9 per cent to 84,262, from 79,597 last April, according to an industry report by DesRosiers Automotive Consultants. 

It was also the best month for automakers as a group so far this year, with sales up 6.9 per cent to 159,942 from 149,658 last April. Sales for the first four months of the year are up 3.6 per cent, the industry report said.

Ford Motor Company of Canada led in sales, with an increase of nine per cent to 25,548, its best April in 11 years.

Ford sales for the 12 months ending in April were also nine per cent above the same period a year earlier.

It saw car sales rise 33 per cent, while truck sales were up three per cent.

Chrysler Canada, the second best-selling automaker in Canada last month, said sales were up 16 per cent to 23,837, its second-strongest figures in the month since 2002.

Consumers scale down 

Car sales were up 45 per cent, led by the Chrysler 200 sedan, as consumers scaled down.

"At $1.40 per litre for gas, Canadian consumers are rapidly discovering the fuel economy improvements we have made to our vehicles," said Reid Bigland, president and CEO of Chrysler Canada.

GM — once Canada's top-selling automaker, which dropped to third place last month — said April sales were on par with last year with 22,622 vehicles sold. GM's car sales grew by 24 per cent, while truck sales were up a more modest 11 per cent.

Hyundai Auto Canada Corp. set a one-month sales record, selling 14,267 units in April for a gain of 14.2 per cent over the same period last year.

Hyundai Canada's year-over-year sales have increased for 28 consecutive months.

Meanwhile, sales at Honda Canada, the Japanese car maker that has been dealing with parts shortages causing vehicle output problems since the Mar. 11 earthquake and tsunami, fell six per cent to 12,269 units.

"With production issues that may affect availability of certain Honda and Acura products through the coming months, we sincerely apologize for any unfortunate delay our customers might encounter in taking delivery of their new car or truck," it said in its report.

Volvo Canada also reported double-digit growth in April, with its 705 vehicles sold up 11.4 per cent compared to March. Year-to-date sales were up 2.1 per cent over the first four months of 2010. It did not provide data comparing sales to last April.

Gasoline prices help GM's U.S. sales

In the United States, General Motors reported 232,538 in total sales, a 27-per cent increase from the same month a year ago.

High gasoline prices drove sales gains in fuel-efficient passenger cars and crossovers, with the best sales month ever for the Chevrolet Cruze and record sales for the Chevrolet Equinox and GMC Terrain compact crossovers.

"Recently, rising fuel prices have led many to re-think their vehicle choice," said Don Johnson, vice president, U.S. Sales Operations.

GM's retail sales, those to individual customers, rose 25 per cent versus last April with cars and crossovers up 49 per cent and 28 per cent, respectively.

Ford Motor Co. said its U.S. sales rose 13 per cent, largely because of a 26-per cent jump in car sales. But it wasn't only the most efficient cars like the Fiesta and Focus that buyers demanded. Sales of the Mustang sports car rose 59 per cent car as summer driving season approached.

Toyota Motor Corp. saw sales rise by only 1.3 per cent, led by a nine per cent gain from the Camry midsize sedan, traditionally the most popular car in the U.S. But sales of Toyota's Corolla compact fell 13.3 per cent, and two models made in Japan, the Yaris and the Prius, saw sales declines.

Automakers brace for shortages

Ford said that the impact of gas prices could be felt in its largest vehicles. Half of all pickup buyers chose Ford's new V-6 engine instead of the less efficient V-8.

Hyundai Motor Co.'s sales jumped 40 per cent, largely because of fuel-efficient models such as the Elantra. The car's sales more than doubled.

Sales were strong despite automakers' decision to ease up on deals in April. Total U.S. incentive spending by automakers fell $250 to $2,118 per vehicle from March, according to Edmunds.com. That was the lowest level since October 2005, when automakers pulled back sharply on discounts following the employee-discount-for-everyone deals that summer.

"This is the clearest indication yet that automakers are gearing up for inventory shortages," Jessica Caldwell, director of industry analysis for Edmunds, said in a statement.

She said demand for new cars is growing as the economy recovers. However, buyers may decide to wait for deals to return, and that may not be until fall.

With files from The Canadian Press and The Associated Press