January auto sales remain chilly

The weak economy continued to take its toll on the auto sector, with many manufacturers reporting weak January sales.

General Motors of Canada Ltd. said Tuesday that its monthly sales dropped more than 46 per cent from last year.

GM Canada said it sold 14,254 cars and trucks last month, down from 26,668 from January 2008. The company sold 5,034 cars, off more than 60 per cent year-over-year, while truck sales fell 34 per cent to 9,220.

"January sales continued to reflect the overall Canadian market challenges seen at the end of 2008," said Marc Comeau, GM of Canada's vice-president of sales, service and marketing.

The soft sales in Canada extended to other automakers as well. Honda Canada Inc. reported combined January sales of 7,559 units by its Honda and Acura divisions, a 37 per cent decrease year-over-year.

Sales of Honda brand vehicles were 6,460 units, down 39 per cent from last year. Acura sales were 1,099 units, down 26 per cent over last year.

"The results for January reflect our expectations," said Jerry Chenkin, executive vice-president of Honda Canada Inc. "Our January results last year, which were twice the monthly average, were unusual and reflected initiatives that we had introduced specially to counter the strong Canadian dollar.

Toyota Canada Inc. reported January sales of 10,269 vehicles under the Toyota and Lexus brands, down slightly from the 10,559 it sold in the same month of last year.

The situation was better at Mercedes-Benz Canada, which said it sold 1,178 vehicles in January, a 10.3 per cent increase compared to January 2008 and the best January ever for the brand.

In the United States, however, little good news emerged from the sector.

General Motors dealers in the U.S. sold 129,227 vehicles in January, down 49 per cent compared with a year ago. Ford Motor Co. said its sales for January were down 40 per cent for the month while Toyota said its U.S. sales were off by 32 per cent.

One auto sector analyst said he expects the first quarter will be "really bad" so the January numbers were not unexpected.

"Fortunately, January is the weakest month for sales each year so there is still time to recover some of the carnage," said Dennis DesRosiers. "For now we are still holding to our forecast of the market being down in the 10 per cent range. I'm probably wrong but then it is a long year and a lot of water has to flow under this bridge."