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Posts Tagged ‘Dennis DesRosiers Consultants’

DesRosiers Automotive Consultants – February Observations‏ Actions Dennis DesRosiers – Car Expert (dac@desrosiers.ca) Schedule cleanup 9:27 PM [Keep this message at the top of your inbox] Newsletters, Photos To: DesRosiers Automotive Consultants Picture of Dennis DesRosiers – Car Expert

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Disability, Education, Entertainment, Environment, Events, Health, Home Decor, Living, Media Writing, Movie Reviews, Music, Opinion, Radio Podcasts, Religion, Restaurant Reviews, Sports, Technology, travel, Uncategorized, Video Work, Writing (all kinds) on February 24, 2013 at 3:00 AM

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DesRosiers Automotive Consultants Inc.

www.desrosiers.ca


A full version of this article can also be found in the  DesRosiers Automotive Reports published by DesRosiers Automotive Consultants Inc. For more information on these reports please contact Pina Vaccaro at (905)881-0400 x18 or pina@desrosiers.ca or visit www.desrosiers.ca


 

Please note that DesRosiers Automotive Consultants Inc. is offering a free three month trial of this publication to better allow for your assessment of the information provided. If you are interested in this free trial or have any questions about this publication, please do not hesitate to contact Pina Vaccaro at (905) 881-0400 x18 or pina@desrosiers.ca.

 

 

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December 2010 Automotive Sales

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on January 13, 2011 at 8:00 AM

Photo Courtesy of Google Images

Image result for Ford Granada

December 2010

By Dennis Desrosiers

Attached are preliminary light vehicle sales for Canada. We found out today that Suzuki will likely be reporting tomorrow so the attached includes full-year sales for all OEM and Jan to November sales for Suzuki. I decided I’d rather have something out on the street rather than wait until tomorrow. As soon as Suzuki reports I’ll update the chart and re-send it to everyone. Sorry.

December sales were flat ( up only 0.5 percent ) compared to 6.6 percent for the full year. 2010 was healthy but still well below the levels achieved in 2005 to 2008. Canada still has a long way to go before we are totally out of this light vehicle sales slump.

Sales, however, were slightly better than what we and others forecast a year ago when we were predicting sales up only 2 or 3 percent. The reason is quite simple. Incentives. I have never seen the level of incentives available to consumers during 2010 in my 40 plus years analyzing the market. Incentives north of $10K were common and with a few exceptions almost every company played their incentive card at or near record levels. Even Honda who rarely match the market with big-time incentives finally gave ground and matched the industry leaders starting in the fall. And it showed in their sales numbers which were very respectable over the last 4 months including December with sales up 4.1 percent. Toyota was the one significant OEM that did NOT play the incentive game to the degree that almost all other OEMs played. They don’t seem to accept ( at least not yet ) that with their numerous recalls all year they essentially told consumers that they “were just another vehicle company”. When they owned the “best quality” title they didn’t have to play the incentive game to the degree other OEM had to use them. Since they abdicated this title in 2010 and became just another vehicle company they now need to offer incentives at the same level as all the other vehicle companies. Toyota’s stubbornness cost them dearly this year with sales down in December by 45.3 percent and year to date by 16.2 percent in a market that was up strongly. They will argue that their product got a bit old and this is the reason for their decline and that in the next few years they have all kinds of product updates coming to the market that will solve this issue. I will argue that ALL the major OEMs have a lot of new product coming to the market so Toyota is unlikely to get the lift in the market that they might expect unless they “play the game”. I hope I’m wrong.

Ford was the big winner with the major OEMs this past year with sales up 19.1 percent and for the first time in about 50 years they were the number one seller in the market instead of GM. Indeed the F-series pick up trucks sold just under 100K units which makes it the best selling single model of vehicle in one calendar year in the entire hundred plus year history of the automotive sector in Canada.

With the luxury brands, the big story is a toss-up. Audi had the largest gain in sales with sales up 26.7 percent but Mercedes Benz overtook BMW to become the number one selling luxury marque in Canada for the first time since I believe the year 2000. With luxury sales you have to back out sales of Mini, Sprinter vans and smart cars from the overall totals and when you do you find Mercedes was number one. Their sales were up 17.5 percent this year ( including smart cars and Sprinter vans ) while BMW sales were up only 9.4 percent ( including Mini ). I’m also told by dealers that Mercedes achieved this record AND remained very profitable which is quite an achievement. Of course, everyone discounts but most of the sales in the luxury segments were driven by great product rather than heavy duty discounting.

LandRover would hold the crown for most successful niche Luxury company with sales up 27.0 percent on the year, Porsche also had a great year with sales up 20.5 percent.

Although everyone points to Ford’s success, including myself, it was actually Chrysler that led the Detroit three on a percentage increase basis with sales being up 25.7 percent on the year ( Ford was up 19.1 percent). It was no more than 18 months ago that just about everyone wrote Chrysler off as a lost brand. This year they increased market share ( incentive has driven mind you ) and came within about 40K units of outselling GM. They are definitely NOT a lost brand.

GM is likely happy with their performance this year. Although down by 2.4 percent they had set a market share goal of 15 percent and they met this goal handily coming in at 15.8 shares in 2010. Sales in the last few months picked up nicely with December increasing by 6.8 percent ( also incentive driven although new product at year end really helped as well ).

For the first time since 1995, the Detroit three picked up market share from the import nameplates. After losing market share for 15 years in a row we analysts had come to believe Detroit would eventually fade to black. The restructurings at GM and Chrysler and the incredible turnaround at Ford clearly shows that Detroit still has a pulse. Detroit three sales were up 6.9 percent while import nameplate sales were down by 6.0 percent.

And so much for the environment. Sales of passenger cars were down by 9.8 percent as consumer and fleets moved back into the truck market with sales up 8.0 percent. This gives light trucks an all-time record market share at 54.5 percent of the market. More detail will come in our Top Ten report in a few weeks.

Dennis

November 2010 Car Sales

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on November 27, 2010 at 8:00 AM

OBS2010-11-A Window of Opportunity

By Dennis DesRosiers

My Observations for November … this month I discuss the Outlook for the Automotive Aftermarket or as some in the industry call it … the parts and service business or as car dealers call it … Fixed Operations. Whatever it is called it looks pretty good for selected players in the coming years.

Dennis

Light Vehicle Sales – October 2010‏

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on November 9, 2010 at 8:00 AM

By Dennis DesRosiers

Light Vehicle Sales – October 2010

SAAR – Monthly Canadian sales

Attached are light vehicle sales for the month of October and year to date. Sales in October were up only 1.4 percent and given the massive amount of incentives in the market this year compared to a year earlier it appears that the vehicle companies are not getting much bang for their buck. That being said October 2010 at 123.2 thousand units was the best October since 2002 ( 134.7K units) and the second best October on record. And this is reflected in the SAAR ( attached ) which came in at 1.61 million units. If you look at the six-month trailing average number you will see that each month it is creeping up slightly which is positive for the short-term outlook for vehicle sales in Canada.

The 1.4 percent increase for October brings YTD sales up by 6.6 percent to 1.329 million units and puts us on track for about a 1.56 million total this year an increase of at least 100K units about 2006. But again with the amount of incentive money in the market one would have expected better. Indeed I’m beginning to wonder whether to actually lower our forecast for next year. I don’t believe the OEMs who have huge money on the windshield of their vehicles can maintain this pace and I don’t have much faith that the general economy will improve enough to offset any reduction in incentive money. So I can build a case that sales could be actually lowered next year than this year. I’m not there yet and would like to see the final two months before formalizing our forecast but there isn’t a lot in these stats to be optimistic about sales for next year. They could and probably will increase but I suspect by relatively modest amounts. We are not out of this auto slump just yet.

Ford remains the number seller of vehicles in Canada in October and YTD and is pulling away from GM slightly as GM continues to see difficult sales month in and month out. GM’s sales in October were actually down 4.8 percent while Ford’s sales were up 8.1 percent. Chrysler is actually close to catching GM with sales up 5.0 percent in October. Indeed the Detroit three ( even with a poor month from GM ) continued to take share from the import nameplate brands. In April of this year the D-3 outperformed import brands as a group for the first time in over a decade and each month since April this has continued. Some of this performance was because of poor comparables from a year ago but after seven consecutive months, we are beginning to see something more fundamental develop. D-3 performance is rooted in the spectacular year that Ford is achieving, a turnaround at Chrysler especially with their light trucks, stabilization at GM and terrible years at both Toyota/Lexus and Honda/Acura.

Toyota’s sales in October were down by 23.2 percent and are now tracking down 12.8 percent on the year. Lexus sales were down 16.4 percent in October and are now down 7.0 percent YTD. With heavy incentive money Honda was able to increase sales in October by 20.7 percent but are still down on the year by 0.9 percent. Acura sales were down by 17.2 percent on the month and are now down by 3.4 percent on the year.

I also am closely following our friends from Europe and especially from Germany who universally is having great years led by Audi up 25.5 percent for the month and up an astonishing 33.3 percent on the year. Audi now outsells Lexus and is close to catching Acura in the Luxury brands.

VW was up 21.5 percent on the month and are up 12.0 percent in the month. They tell me they can sell every TDI they can get their hands on … yea Diesel ( I’ve always been a big fan of diesel products ).

And then there is the battle between our two luxury giants BMW and Mercedes Benz. On their core brands, Mercedes Benz is slightly outselling BMW. MB was up 6.7 percent in October while BMW was up 5.0 percent in October. This allowed MB to maintain their sales edge YTD over BMW selling 24,057 units at MB compared to 22,440 units for their southern countrymen. Both companies deserve a lot of credit. MB is near the top of its product cadence cycle and has resurrected itself as the number one selling luxury marque in Canada. It wasn’t that long ago that Mercedes had fallen to I believe the fifth position amongst Luxury brands. Meanwhile, BMW is holding it’s sales levels well considering it is at the bottom of its product cadence cycle. Indeed it is amazing that BMW has been able to maintain sales their current sales pace in a segment that is so much about the product and with the product that is relatively long in the tooth. And if you add Mini to BMW ( mini is having a good year) and if you add smart to MB (smart is having a terrible year ) then the combined BMW/Mini brands are outselling the combined Mercedes Benz/smart brands ( 24,057 to 22,440 units ).

And speaking of Europe one has to remember Volvo, Porsche, and the Tata brands … Jaguar and LandRover … Jaguar is tiny and is down on the year by 4.2 percent but Land Rover is up quite a bit to 2,130 units an increase of 35.9 percent. Porsche is also up nicely to 1,705 units ( up 17.6 percent ) on the year. And finally, Volvo is also up slightly … 3.2 percent.

All together European based brands are taking a lot of market share away from the Japanese brands in Canada. Eight of the ten Japanese brands are underperforming the market this year and some by a lot. Infiniti and Subaru are the two exceptions.

And I can’t forget our two Korean brands who chug along at a record pace. Hyundai sales in October were up 8.6 percent and Kia’s sales were up 24.6 percent.

With Ford and Chrysler doing so well it also results in a very strong market for light trucks ( Chrysler’s core best products and to degree Ford as well although Ford also has a strong passenger car line up). Light truck sales were up 13.6 percent in October and are now up 19.3 percent YTD. Passenger car sales were down by 10.5 percent on the month and are now down 5.3 percent on the year.

Till next month.

Dennis

60th birthday and 25th anniversary of our company‏

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on September 7, 2010 at 6:11 PM

By Dennis DesRosiers

This Sunday, September 12’th I turn the big 60 and this November the 28’th the company completes its 25’th year in business.

I guess 25 years is proof that there is a need for the kinds of things that we do around here. And turning 60 explains some of the cynicism that I’m accused of in recent writings. After studying and writing about this sector for close to 41 years I still believe I only understand a small fraction of how this sector works. The one really good thing about having to write my “Observations” column each month is that it forces me to noodle through another issue and to my surprise I still come up interesting stuff most months … not all months … but most months. Re-read the Observations I sent out for August for instance. I think it is quite interesting and one of the better ones I’ve written in recent years.

My staff was wanting to have a big open house and we were trying to pull it off for this week but it was eating a lot of time, I took the summer off so I wasn’t around to Sheppard it through and it was going to cost a fair amount to host. So today I canned the idea entirely. Instead, we are going to make a very generous donation to our Endowments at the University of Windsor and Georgian College.

You will remember that the proceeds from my book went towards establishing two “DesRosiers Endowments for the Advancement of Automotive Studies” … one for each school. All together we were able to raise just under $150,000 for these Endowments and the proceeds are already going to students starting today the first day of school. We funded eight .. yes “EIGHT” scholarships for students this year. This is the best birthday present a 60-year-old could ask for. Coming from a grease monkey family any success I’ve had in life goes back to the decision to seek higher education and it thrills me that my book and other fundraising activities have raised enough money to help send eight young adults on their way to a higher education with an automotive emphasis as the focus of their studies.

So I apologize to anyone who was looking forward to our planned open house but I think funding young adult’s higher education is an adequate replacement.

By the way, I have absolutely no plans to retire. As I tell anyone that asks I plan to be carried out of here in a box and quite frankly a company like ours is not easily sellable so it is unlikely that I can cash out and go into retirement through that window.

Like this year and three years ago I do plan on taking more time off each year and hopefully working my way down to about 7-8 months on and 4-5 months off but being a “type A” personality I’m not sure I’ll reach that goal. I also set a goal of losing 50 pounds by my birthday and failed miserably … got to just over 30 but fell back a few the last week or so and am now only a little over halfway. But I do plan on staying on the treadmill and watching the calories ( I find it nearly impossible to formally diet ) and will hopefully get to my goal eventually. Man o Man is it hard to lose weight as you get older. But this is extremely important since if I want to work I have to stay healthy, so losing weight is top of mind.

Thanks to all my clients for 25 years of support, we strive to exceed our customer’s expectations on every project. And thanks to all my family, friends, extended family and friends and industry executives for the support over our 25 years.

Dennis

July 2010 Car Sales

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Sports, Technology, travel, Writing (all kinds) on September 3, 2010 at 8:00 AM

Dennis DesRosiers Writes About Car Sales in July – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - September 3, 2010 - 2

Dennis DesRosiers – September 3, 2010

Dennis DesRosiers – September 3, 2010 – 1

By Dennis DesRosiers

I was away on vacation last week ( yes I do take time off once in a while) when the July sales numbers were released so didn’t do a write-up. But I wanted to at least send out some quick thoughts.

July was a great month for sales and it shows in the SAAR tracking that we do now. The SAAR at 1.69 million units, in fact, was the best in two years ( see attached chart ). Not at the level we achieved through most of the last decade but still very respectable and trending in the right direction. You will also notice that at 148.8 thousand units it was just under the monthly totals achieved in 2008 and 2005 and above the monthly levels achieved the rest of the decade. This is a good sign. The major concern is the amount of incentive money needed to move this much product and the ability of the OEMs to maintain this level of spending per unit.

July also continued the trend of Ford and to a degree Chrysler and GM taking market share away from the import nameplate brands. Ford was up 22.4 percent for the month, GM was up 22.4 percent and Chrysler was up 40.0 percent. You have to be careful with the GM and Chrysler performance since the comparable year-ago month is tainted by their bankruptcies in the US but Ford’s number is the real meal deal. As a result, the Detroit three’s share this year is tracking at couple points higher than last year at 46.6 percent compared to only 44.2 percent in 2009.

July also continued the trend of the light truck sector significantly outperforming the passenger car side of the market. So much for fuel efficiency targets. Light trucks were up 22.0 percent versus passenger cars down 7.8 percent for the month. YTD results are similar. Some of this is centered on the return of the Detroit three but most of it is the simple fact that much of the light truck market is commercial use related and these customers have no choice but to renew their fleet as the economy improves. Indeed business-related vehicle purchases were more severely hurt by the deteriorating economy the last couple years so companies are taking the opportunity of a better economy to come back into the market to update their fleets. The Detroit three are more focused on commercial fleets than the import nameplates and this is one of the reasons they are having a better year. It will be interesting to see retail vs fleet sales when the numbers are finally released. For some reason, these have been slow to come to light this year but we are hopeful that they will be available shortly.

One of the issues everyone should be careful with anywhere you look at the automotive sector is comparisons to last year. Indeed virtually all comparables should be treated with extreme caution since 2009 was so volatile as well as unique. It would be fairer in most instances to compare performance to two years ago but even that creates some analytical problems so just take the year over year comparisons with a grain of salt and look at the broader picture whenever possible.

Car Conference

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Sports, Technology, travel, Writing (all kinds) on August 28, 2010 at 8:00 AM

Dennis DesRosiers Writes About a Car Conference – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - August 28, 2010 - 1

By Dennis DesRosiers

Dennis DesRosiers – August 28, 2010

Once in a while, a really good idea comes along and this is one of them.

One of the forgotten elements or at least little talked about or understood elements of the restructuring of the automotive sector in Canada is the new car dealer. The average dealer in Canada has upwards of $8 million in debt tied to the survival of their brand and dealers are ground zero when it comes to the consumer and their changing tastes.

And radical changes are occurring on a number of fronts with respect to car dealers. For instance, 91 dealer groups ( 4 or more stores ) now control close to half of the vehicle sales in Canada an unprecedented level of power in the marketplace. Not only has dealer ownership changed but how dealers are financed and how they help consumers finance their vehicles is changing rapidly. Technology has always been a major part of dealer operations but the dealers are exploring new technology frontiers in pursuit of an elusive marketing edge. These and many other topics directly related to the new car dealer will be explored at this conference.

AND Maryann Keller has agreed to be the keynote speaker. Maryann is the absolute best analyst in the automotive sector anywhere in the world. Many will remember that she was the first speaker at all the incredibly successful Financial Post automotive conferences each year throughout the 1990’s and into this decade Maryann is always provocative and “spot on” with her comments. She has been deeply involved with one of the largest publically traded dealer groups in the US and I’m sure will have some comments on the future of dealers and dealer groups going forward.

So I encourage you to give this conference serious consideration for attendance. You’ll learn something if you attend.

Dennis

More information and registration is online at:

http://www.cadexcellence.ca/index.php/Registration.html

Or contact Kristina Silva directly at (905) 726-5448 email: ksilva@clbmedia.ca

Decade in Review – Part 44 – WD Store Counts – 2000 to 2009

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on August 26, 2010 at 8:00 AM

Dennis DesRosiers Does A Decade in Review for Cars – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - August 26, 2010

By Dennis DesRosiers

Dennis DesRosiers – August 26, 2010

Attached are store counts for the major WD/Buying Groups in Canada for 2000 to 2009.

Warehouse Distributors/Buying Groups for those not knowledgeable about the aftermarket are the companies that own massive warehouses that distribute aftermarket parts to thousands of wholesalers across Canada ( if in the US they would be called Jobbers and are often called Jobbers north of the border as well ). These wholesalers, in turn, supply the approximately 20 thousand service outlets in Canada and these service outlets operate about 107 thousand service bays. With this many bays to supply you can see why Canada needs so many wholesalers.

We track 11 of these groups although some have consolidated in recent years so there are fewer players than what readily appears. In addition, we consider every new car dealer in Canada a wholesaler as well since they have become very active supplying aftermarket parts into the traditional aftermarket but these are NOT profiled in this analysis.

There has been a relatively slow growth in the number of wholesalers across Canada this past decade although some significant changes for any particular group. In 2000 there were 2,552 ( excluding car dealers ) wholesalers in Canada and in 2009 there were 2,763 wholesalers in Canada a relatively small change. Most WD’s have relatively stable store counts or declining store counts. The exception is Modern Sales Co-op who have seen their counts increase from 172 stores to 338 stores, Lordco out of BC/Alberta who have grown from 61 stores to 119 stores, PartSource who have grown from 27 stores to 87 stores and UniSelect who through acquisition have grown from 690 stores to 713 stores but also own Bumper to Bumper out West who add an additional 98 stores to their total. This makes UniSelect the largest WD in Canada by store count. NAPA with 577 stores would be the second largest WD and Modern Sales Co-op the largest Buying Group.

In my next note, I’ll profile some performance variables for this group of players which will provide a better understanding as to performance by market.

Dennis

ps. I’m still on vacation.

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:
Add me to your address book… Want a signature like this?

State of Canadian Auto Manufacturing … one year later

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on August 25, 2010 at 8:00 AM

Dennis DesRosiers Does A Year In Review For Automobiles – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - August 25, 2010

Dennis DesRosiers – August 25, 2010

By Dennis DesRosiers

Well, it’s been a year now since GM and Chrysler emerged from bankruptcy with a billion of taxpayer dollars in their pockets. I looked at a long list of issues in the industry lately ( I’m on vacation as a write this … call me anal ) and the results with one exception were impressive … let us see now

. GM and Chrysler appear to be making progress out of bankruptcy …. check
. Ford is picking up market share … check
. some import nameplate brands are yielding market position to Detroit … check
. cost of manufacturing vehicles at the Detroit three has been adjusted downward and is now more competitive with the new domestics … check
. the markets in Canada, Mexico, and the USA are slowly returning to normal … check
. we haven’t noticed a supplier failure in months … check
. employment is returning to previous levels … NOT!!

Oh no, say it ain’t so Joe. The most important political variable in the automotive equation and the critical reason that our collective Governments dumped over a hundred $ billion into the Detroit three ( note: Ford got money to help meet new fuel efficiency requirements ) was to arrest declines in jobs. Indeed to increase jobs in the automotive sector. I haven’t looked at the US or Mexico but Statistics Canada has new employment numbers out for the year to date to the end of April and they are ugly … indeed very ugly.

We count four subsectors as part of the automotive manufacturing equation. Assembly of vehicles and automotive parts are at the core but we also put in motor vehicle body and trailer jobs and MTDM jobs ( machine tool die and mold ). Together they peaked at just under 200,000 jobs in Canada in 2001. Today they stand at 123,829 jobs a decline of about 80K and the lowest level since 1982. This is the fifth year in a row that automotive manufacturing employment has declined. The big loss was last year when over 34,000 jobs evaporated and panic reigned in Ottawa and Queen’s Park. But any politician that planned to pull a George Bush and stand on a frigate and announce “mission accomplished” had better wait for the next flight. Employment across all four industry sub-sectors continues to deteriorate this year. Close to 10,000 jobs have been lost compared to the identical period a year ago and remember a year ago the industry was in deep trouble so to be down from the depressed levels of a year ago indicates that the automotive and parts sector in Canada or at least the manufacturing side of the automotive sector is in seriously bad shape.

The assembly sector is the best of the bunch stabilizing at about 36K jobs down a bit from the lost year but no longer in a free fall. Still down over 21K jobs from their peak but at least stable. But the real job producer in this sector has always been the parts producers and they continue their free fall with employment down another 5,000 plus jobs this year. Employment in the parts sector peaked at just over 100 K in 2001 but since that time the auto parts sector has shed over 42,000 jobs with no end in sight.

And very troubling is the fact that one of the core capabilities in our automotive parts sector has always been its close link to the tooling sector and with the auto parts sector in the toilet this has devastated the Canadian tooling sector. The MTDM sector has traditionally been the most stable of our automotive-related manufacturing activities … rarely declining and usually slowly picking up employment. Between 1991 and 2006 this sector grew by 18K jobs to over 28K jobs. Virtually every one of them very highly skilled. Four years later in 2010, it is back to 1991 levels of employment. And most disconcerting is that these are typically the highest skilled jobs in the automotive sector. Canada was never going to be able to hold onto low skilled jobs but high value-added jobs seemed to be saveable. If Canada can’t hang onto high value-added jobs then vehicle and parts manufacturing in this country are in serious trouble.

Politicians should be very worried. We are seeing the willowing away of our vehicle and parts manufacturing sector and I quite frankly don’t see much ability for any politician to stop this. We don’t even know WHY these jobs are disappearing and until we understand this issue then any response by any Government will just be a shot in the dark.

My thoughts on this sunny day written from my secret vacation hideout.

Dennis

DesRosiers Automotive Consultants Inc
Dennis DesRosiers
President
dennis@desrosiers.ca
80 Fulton Way Suite 101
Richmond Hill, Ontario
L4B 1J5
tel: 1-905-881-0400 – 13
fax: 1-905-881-7456
mobile: 1-416-543-8611
http://www.desrosiers.ca
AIM: Skype ID: SkypeIn #:
Add me to your address book… Want a signature like this?

Light Vehicle Sales – May 2010 (updated to include Volvo )‏

In Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, travel, Writing (all kinds) on July 20, 2010 at 8:00 AM

Dennis DesRosiers – July 20, 2010

Dennis DesRosiers – July 20, 2010 – 1

Dennis DesRosiers – July 20, 2010 – 2

By Dennis DesRosiers

Comparables … a nasty little word that many OEMs don’t like to include in their monthly press releases. By this I mean everyone likes to be selective in terms of which months they compare their sales to with the obvious intention of making themselves look good.

The proper way to look at sales is to take a longer-term view and not to focus too heavily on the month over year-ago month sales since at either end of this equation there can be some funny things that make sales performance look either very good or very bad. That is why we now also publish a SAAR with our monthly sales release ( see attached chart ) which takes 10 years of monthly sales data and estimates what the current month REALLY is telling the market given long-term trends. For May the SAAR was 1.45 million units … atrociously low by any measure and much worse than the 0.6 percent increase that the raw numbers indicated. It is now coming up on a year where sale have been tracking on a SAAR basis in the 1.5 million range … this should tell the industry something if any want to listen. Look at the six months trailing average line in the chart .. pretty flat.

And it is interesting to look at specific OEMs against a fairer comparison. In this case, I did a simpler analysis. Instead of comparing their sales to 2009 I compared them to 2008 which was a more normal May in the long run. Perhaps a little high compared to earlier in the decade but a lot fairer comparison than May 2009 when sales were in the toilet especially for some individual brands like Chrysler and GM who were in the middle of bankruptcy proceedings. For instance, Chrysler reported a sales increase in May 2010 of 53.5 percent over May 2009 but when compared to May 2008 Chrysler’s sales were actually down by 23.3 percent for the month. YTD Chrysler’s sales are up 27.9 percent from 2009 but still down by 18.3 percent from 2008. I think you get my point. I put together a small table of the top six OEMs which is attached and I encourage you to take a close look as there are some surprises. Like Toyota being down Jan-May by 22.9 percent from 2008 and Honda being down by 30.4 percent for the same period. Honda indeed is the worse performing and Toyota is the third worse performing OEMs on this chart when a fairer comparison is used. We had gotten so used to these companies walking on water that we lose track of the fact that they can also stumble from time to time. And look at Ford and Hyundai … both up nicely not only on the month and YTD from a year ago but also from two years ago. Now that is impressive.

I can’t explain May sales being so weak. We have been saying all along that sales have been lean for some nine or ten months but nobody would have predicted that May would be this bad especially on a SAAR basis. It may be the fleet that is behind this but we don’t see fleet sales for a number of weeks. And there is no doubt that Canadians significantly overbought vehicles for most of the last decade so maybe it is “needs” based buyers that are NOT in the market. Anybody who bought a new vehicle in the last 5 to 8 years quite frankly doesn’t NEED to buy another for quite some time. The average vehicle bought in the last 5-8 years will not be scrapped for at least 15 and possibly 25 years and will last 350,000 to 400,000 kilometres. So the fundamental need for a new vehicle is weak and is unlikely to strengthen for quite some time.

Also congrats to those OEMs who showed serious sales improvements this past month .. the list is long. Mercedes Benz up 22.2 percent, Subaru up 25.6 percent, Volkswagen up 9.0 percent, Audi up another 13.4 percent, Ford up 19.4 percent, Chrysler ( see earlier comment ), Kia up 13.9 percent, Land Rover although small they were up 29.9 percent and the same with Porsche up 19.9 percent. These companies are all feasting on GM who were down 17.6 percent, Toyota down 16.6 percent and Honda down 28.2 percent.

Till next month.

Dennis

May 2010 Car Sales

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on July 17, 2010 at 8:00 AM

Dennis DesRosiers – July 14, 2010

April 2010

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Technology, travel, Writing (all kinds) on July 13, 2010 at 8:00 AM

Dennis DesRosiers Writes About the Auto Industry – Photo Courtesy of Dreamstime.com

Dennis DesRosiers - July 13, 2010 - 1

By Dennis DesRosiers

There’s a new sheriff in town. Attached is our top ten list for the month of April and for the year to date. And for the first time in about a decade, there is a new leader on the passenger side of the equation. Barely mind you but the Mazda3 was the best selling passenger car in April and YTD. This is the first time in a very long time that the Honda Civic has not been a runaway leader this far into the new year. So there is a new sheriff in passenger car town although I’m sure the incumbent will have something to say about that over the remainder of the year. Don’t you just love a good fight?

The F-series pickup trucks from Ford are the runaway leaders on the light truck side of the equation and indeed they are also the most popular of any model of vehicle sold in Canada. And by a long shot. Canadians love their pick up trucks…. F-series up YTD by 24.7 percent, Dodge Ram up 89.2 percent ( not a typo ), GMC Sierra up 29.4 percent and Chevy Silverado up 23.0 percent … huge by any measure.

And consumers are also ignoring the pleadings from our politicians ( and every OEM who are touting Green ) and are buying larger less fuel-efficient vehicles for the first time in Canada in a very long time. Small fuel efficient entry-level vehicle sales were down 2.3 percent in April while Large/Luxury/Sports vehicles are up 22.2 percent and commercial use vehicles are up 25.1 percent. This is also one of the larger gaps in performance between these groups in a very long time. Year to date it is a little closer but the entry-level segment is up only 7.8 percent YTD while Large/Luxury/sport is up 29.2 percent and light vehicle primarily for commercial use are up 30.4 percent year to date. This shows you very clearly the power of the consumer. Virtually every OEM has gas more miz’s in their line up and gas guzzler’s in their line up. The consumer gets to pick their vehicle of choice (NOT THE OEM OR THEIR DEALER) and they want the larger less fuel efficient ones. AND THERE IS NOTHING ANY OEM OR POLITICIAN can do about it. The consumer makes this decision NOT a Government official. And no politician will stand up and try to make a consumer buy something they don’t want to buy. We are thus on a collision of unprecedented proportion as regulators put in place fuel efficiency targets that CONSUMERS are rejecting and will continue to reject. Witness the last dozen or so months of sales in Canada.

Till next month.

Green Agenda

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, travel on May 31, 2010 at 9:45 AM

Dennis Desrosiers – May 31, 2010

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