06-21-17

CANADIAN SALES MORE NUMEROUS THAN EVER IN MAY 2017; CANADIANS PAID MORE THAN EVER, TOO

2017-Honda-Civic-hatchback-1977-honda-civic-hatchback-1-610x407

By Timothy Cain - Canadian auto sales surged to record levels in May 2017, surpassing the previous monthly record from April of last year by an 8-percent margin and topping 200,000 units for just the second time in history.

You know it's going well when, in a virulently anti-car market, passenger car sales increase, year-over-year.  And in the fifth month of 2017, car sales did indeed improve, growing 3-percent beyond May 2016 levels.

You know it's truly going well when, in a market that had already seen pickup truck market share climb to 20-percent, pickup truck sales jumped 38-percent to form 22-percent of the industry's volume.

And you know it's going exceptionally well when, in the span of just one month, the relatively small Canadian market purchases and leases 217,000 new vehicles at significantly higher prices than in the past.

According to Desrosiers Automotive Reports, Canada's auto industry climbed above 200,000 sales for just the second time in history.  Up to 11-percent, year-over-year, Canadian sales improved by roughly 22,000 units despite outside-the-norm declines from BMW, Chrysler, Dodge, Jeep, and Volkswagen.

While losses at a handful of its brands - including a 30-percent dive at Jeep and a 25-percent downturn at Chrysler - clearly diminished some of its potential, Fiat Chrysler Automobiles still says the automaker sold more vehicles in May than ever before.  FCA volume was up 5 percent to 33,186 units.

The Ford Motor Company led all automakers with 34,475 sales, a 17-percent year-over-year improvement that drove the company to its best May since 1989.  General Motors' 36-percent improvement to 31,149 sales produced the best May for GM since 2009, including the best month in Cadillac's history.  Record sales were a common theme at numerous other auto brands as well, from Audi to Honda to Porsche.

That incentives are high is not news to Canadian car buyers.  According to J.D. Power figures revealed by Automotive News Canada, the average new vehicle discount in May 2017 measured $5,800 2-percent higher than in May 2016.

But the typical new vehicle transaction price grew by roughly $1,400 in May 2017, driving the average transaction price above $37,000.

Selling more vehicles, and selling them at a higher price?  Automakers will take that.  Not only are Canadians optioning up existing vehicles, but redesigned vehicles are arriving in Canada with base prices that reflect the weakening Canadian dollar.  The 2018 Honda Odyssey, for instance, sees its MSRP rise 12 percent.

At the heart of the market, where affordability is key, the Ford F-Series - Canada's leading line of vehicles - reported its second-best month ever in May.  Ram P/U sales reached record levels, nearly catching the No. 1 Ford.  The Honda Civic, Canada's top-selling car, was up 5-percent to 8,616 sales, 11-percent of all car sales.  The Ford Escape, a historic Canadian favorite, reclaimed its old position and led all SUVs/crossovers thanks to a 26-percent jump to 5,397 sales.

Meanwhile, May's extraordinary Canadian auto sales achievements, particularly in the light of steady incentives and rising ATPs, have led forecasters to increase their annual forecasts.  Canadian auto sales reached record levels in each o the last four calendar years.  Through the first five months of 2017, Canadian auto sales are up 5 percent.

If that rate of growth continues, Canadians will, for the first time every, buy and lease more than 2 million new vehicles in 2017.

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10-26-16

CONSUMER REPORTS YANKS HONDA CIVIC RECOMMENDATION ON POOR RELIABILITY

Honda

Another ding to Japanese car maker struggling to
maintain its stellar quality reputation

By Christina Rogers, The Wall Street Journal - Consumer Reports has pulled its recommendation for the Honda Civic after owners of the popular compact car reported many reliability issues, representing yet another ding to the Japanese car maker which in recent years has struggled to maintain its stellar quality reputation.

The influential product-review magazine pointed to several problems on the redesigned Civic - ranging from electronics failures to entire dashboard consoles needing replacement - as reasons for withdrawing its coveted stamp of approval for the second time in five years.

Jake Fisher, head of auto testing for Consumer Reports, said this is the first time in recent memory the magazine has yanked its recommendation of the Civic for poor reliability scores, a surprise given Honda's long record for finishing near the top of the magazine's quality rankings.

Honda slipped two notches to number 10 in Consumer Reports' latest reliability study released on Monday, while rival Toyota Motor Corp. held steady with its Toyota and Lexus brands topping the list of most reliable brands.

Honda, in a statement, said it values both customer and third-party feedback and will continue "working diligently to enhance the usability and functionality of these in-demand technologies in our unrelenting effort to create new value for our customers."

General Motors Co.'s Buick brand jumped four spots to number 3 in the latest rankings, making it the first domestic brand in more than three decades to break into the top three for reliability.  Nissan Motor Co.'s luxury Infiniti brand climbed 16 notches to land in the top 10.

"We see across the board as auto makers introduce complex electronic systems they're having more problems," Mr. Fisher said.

Honda made extensive design changes when it overhauled the Civic for the 2016 model year, increasing the chances of problems occurring, he added.

Whereas Honda once took a more conservative approach to model redesigns - phasing in major changes over several years rather than all at once - it has become more aggressive in recent years in moving quickly to introduce new technology, Mr. Fisher said.

In 2011, Consumer Reports dropped its recommendation for the 2012 Honda Civic, citing "lower interior quality" and "a choppy ride, long-stopping distances and pronounced road noise."

Honda has also encountered other quality woes in recent years related to problems with faulty Takata Corp. air bags and multiple recalls on its subcompact Fit.

GM continues to improve in Consumer Reports' reliability rankings with its Chevrolet brand climbing five spots to number 15.  The Detroit car maker, however, continues to struggle with its large trucks and sport-utility vehicles, Mr. Fisher said, with the Cadillac Escalade ranking among the least reliable vehicles in this year's study.

Ford Motor Co. fell one spot to number 18, mostly because of problems with the dual-clutch transmissions in the Focus and Fiesta small-car models, while four brands owned by Fiat Chrysler Automobiles NV - Ram, Fiat, Chrysler and Dodge - ranked at the bottom of the pack in reliability.

Consumer Reports restored its recommendation for Tesla Motors Inc.'s Model S sedan after yanking the accolade last year due to problems ranging from battery charging issues to leaky sunroofs.

Tesla's overall score, however, landed it fifth from the bottom as continued reliability problems with its Model X sport-utility vehicle continue to dog its quality performance.

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