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Posts Tagged ‘Dennis Desrosiers’

Join us in Stratford Nov. 8 to drive forward the connected and autonomous vehicle revolution!

In Writing (all kinds) on November 7, 2017 at 11:08 AM

Ontario Centres of Excellence

Good evening,

You are cordially invited to join us at an exciting event that will mark Ontario’s next big step in the global transportation and mobility revolution.

The Government of Ontario, in partnership with the City of Stratford, the Automotive Parts Manufacturer’s Association (APMA), Ontario Centres of Excellence (OCE), and Invest Stratford will announce a major initiative related to connected and autonomous vehicles (C/AV) and technology in Stratford on November 8, 2017.

Join government, academic, and industry leaders for this landmark announcement related to the future of transportation and mobility in Ontario.

In addition to remarks from honoured guests, the event will include a technology showcase of local companies in the C/AV space.

We look forward to seeing you there.

Please RSVP to Kimberly Quines at kimberly.quines@oce-ontario.org to let us know you will join us.

Event Information

What: Major announcement regarding Connected and Autonomous Vehicles (C/AV)

When: Wednesday, November 8, 2017, at 2:00 p.m.

Where: Stratford City Hall, Market Square, 1 Wellington Street, Stratford, Ontario N5A 2L3

Note: Market Square is an outdoor location, please dress accordingly.

Ontario Centres of Excellence, 325 Front Street West, Suite 300, Toronto, Ontario M5V 2Y1 Canada

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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Canadian vehicle companies often rely on single models for bulk of sales‏

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Disability, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Movie Reviews, Music, Opinion, Sports, Technology, travel, Writing (all kinds) on February 17, 2013 at 3:00 AM

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Canadian vehicle companies often rely on single models for bulk of sales

 

Platform sharing, flexible manufacturing and brand narrowcasting allow vehicle manufacturers to target ever-narrowing consumer niches with highly differentiated product offerings, but bread-and-butter models still account for majority shares of their parent OEMs’ sales.

 

Despite these trends, many manufacturers – including full-line automakers such as Ford and Toyota – remain heavily invested in individual model nameplates. The F-Series and Corolla, for example, accounted for 39.4 percent and 23.9 percent (respectively) of total Ford and Toyota light vehicle sales in 2012. This, despite the fact that these brands each fielded vehicle lines numbering in the double digits.

 

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It is important to note that this analysis contains certain data anomalies due to the way in which vehicle brands report sales. For instance, while Fiat only fields a single model at present (500), variants of that car (i.e., convertible, Abarth) are reported as separate models. This practice contrasts with those of manufacturers like BMW or Ford, which report all 3-Series and F-Series variants under single respective banners. We have chosen to adhere to each company’s preferred model breakdown.

 

Of special interest is the degree to which many manufacturers rely on C-size vehicles. Mazda (Mazda3 @ 54.9%), Honda (Civic @ 49.4%) and Volkswagen (Jetta @ 45.5%) derive the lion’s share of their brand volumes from single compact models. Hyundai (Elantra @37.4%), Toyota (Corolla @ 23.9%), Nissan (Rogue @ 19.3%) and Kia (Forte @ 19.1%) all possess strengths in B and D-size segments, yet all achieve disproportionate success with their C-size product. Likewise, luxury brands like Lincoln (MKX @ 61.8%), Porsche (Cayenne @ 54.2%), Lexus (RX @ 47.2%) and Cadillac (SRX @ 46.7%) are notably dependent on D-size crossovers to drive volume and profits.

 

DesRosiers Automotive Consultants Inc.

www.desrosiers.ca

 


To move ahead in the automotive world one must stay informed with everything surrounding the industry.  The DesRosiers Automotive Reports (DAR) provide do just that by keeping you in tune with valuable statistics, analysis and commentary, as well as providing insight into where the industry is going.  The article above is a key example of the type of information available through your subscription to the DAR.

 

 

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 or visit us at www.desrosiers.ca.


 

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DesRosiers Automotive Reports – January Observations‏

In Beauty, book reviews, Business, cars, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Movie Reviews, Music, Pets, Radio Podcasts, Restaurant Reviews, Sports, Technology, travel, Video Work, Writing (all kinds) on February 7, 2013 at 3:00 AM

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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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DesRosiers Automotive Reports – Canadian Sales December 2012‏

In Beauty, book reviews, Business, cars, Contact Information, Education, Entertainment, Environment, Health, Living, Media Writing, Opinion, Sports, Technology, travel, Writing (all kinds) on January 19, 2013 at 3:00 AM

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Canadian Sales

MonthlySales2011

Click here for PDF version

For the updated version of the SAAR please click here

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Numbers to look for in year-end sales

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 January 8, 2013 at 3:00 AM

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Numbers to look for in year-end sales

 

With December year-end sales due to be released tomorrow, count with us as we mark several key milestones that we will be looking for in the year-end numbers. Read the rest of this entry »

DesRosiers Vehicle Import Study – “Four times more Porsches imported than Hyundais”‏

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Sports, Technology, travel, Writing (all kinds) on November 15, 2012 at 3:00 AM

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DesRosiers Vehicle Import Study – “Four times more Porsches imported than Hyundais”

 

 

Ø  42 percent of ‘used’ vehicle imports in 2011 were from current model years

Ø  Four times more Porsches imported than Hyundais

Ø  Chevrolet, Ford and Toyota the largest volume brands for imports

 

A new report from DesRosiers Automotive Consultants Inc. indicates that the majority of ‘used’ vehicles imported into Canada are from recent model years with the 2010-12 model years combined representing approximately 42% of all imports in 2011.  The DesRosiers Vehicle Import Study, new from DesRosiers Automotive Consultants Inc. (DAC), demonstrates the effects that cross-border trade continues to have on Canada’s new and used vehicle markets. Read the rest of this entry »

DesRosiers Automotive Reports – Observations

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Movie Reviews, Music, Opinion, Radio Podcasts, Technology, travel, Video Work, Writing (all kinds) on August 22, 2012 at 3:00 AM

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Observations Template

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 Albena Saltcheva at (905)881-0400 x18 or albena@desrosiers.ca or visit http://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 Albena Saltcheva at (905) 881-0400 x18 or albena@desrosiers.ca.

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Desrosiers Automotive Reports

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Sports, Technology, travel, Writing (all kinds) on August 13, 2012 at 3:00 AM

MonthlySales2011

Residual Value of Light Vehicles on the Rise!‏

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Sports, Technology, Writing (all kinds) on August 11, 2012 at 3:00 AM

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Light Vehicle Residual Values Supported by Off-Lease Supply Restrictions

A recovery is well established among residual values of younger used vehicles. DAC analysis of data from Canadian Black Book shows that the residual values of three-year-old used passenger cars have risen steadily in recent years, from 49.0 percent in 2010 to 50.8 percent in 2011 and again to 54.6 percent in 2012. Light trucks have also seen gains, climbing from 48.2 percent in 2010 to 50.6 percent in 2012. Used vehicles are hot and the market seems willing to tolerate higher prices.

These improvements in residual values speak, in part, to past trends in the leasing and fleet sales markets. In the case of the former, Canadians were forced to modify their purchasing habits during last decade’s recessionary years as vehicle manufacturers pulled back their leasing programs. As a result, leasing dropped from a massive 42.4 percent of the total vehicle market in 2007 to just 7.1 percent in 2009. The supply of off-lease and off-fleet used vehicles – particularly in popular segments such as compact passenger car and intermediate sports utility – has diminished considerably; wholesalers and resellers are facing a relative supply desert, and the prices charged for the vehicles trickling through the off-lease tap reflect this shortage.

Some of the lack of supply has been made up by high levels of imports of used vehicles from the U.S., but the pricing of younger used vehicles in Canada remains robust, at least for now.  Dynamics in other segments of the used vehicle market vary considerably, however, reflecting the complex nature of this important market.

Read further about used vehicle market trends, and the complicated interactions between the new and used vehicle markets, in our DesRosiers Automotive Reports and AutoWatch newsletters. Contact Albena Saltcheva (905-881-0400 x.18) for pricing and subscription information.

DesRosiers Automotive Consultants Inc.

www.desrosiers.ca


To move ahead in the automotive world one must stay informed with everything surrounding the industry.  The DesRosiers Automotive Reports (DAR) provides do just that by keeping you in tune with valuable statistics, analysis, and commentary, as well as providing insight into where the industry is going.  The article above is a key example of the type of information available through your subscription to the DAR.

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 Albena Saltcheva at (905) 881-0400 x18 or albena@desrosiers.ca or visit us atwww.desrosiers.ca.


 

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Book Review: Dennis DesRosiers’ The Best of Observations

In Beauty, book reviews, Business, cars, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, travel, Writing (all kinds) on June 29, 2012 at 3:00 AM

Dennis DesRosiers is Owner of DesRosiers Automotive Consultants – Photo Courtesy of Dennis DesRosiers

Image result for Dennis DesRosiers is Owner of DesRosiers Automotive Consultants

By Rachel Muenz

Apart from working in auto parts factories for a couple of summers, I have little knowledge or interest in the Canadian automotive industry. But, I found Dennis DesRosiers’ collection of articles on this topic not only informative but also quite fascinating at times.

DesRosiers, who heads DesRosiers Automotive Consultants Inc., is said to be one of Canada’s most prominent automotive industry analysts. His monthly “Observations” columns have looked at trends and problems in various sectors of the auto industry for almost 20 years. The Best of Observations, as the title suggests, is a collection of the best of these columns from the early 1990s to 2009. Though clearly meant for those who work and or invest in the auto industry, The Best of Observations is also a great read for the average person.

The articles are organized into nine sections which cover each sector of the Canadian auto industry as well as market outlook, strategy and policy issues.

DesRosiers provides his thoughts on where each of these areas is going, a bit of the history involved, problems and blunders in the industry and what he believes are the best ways to fix them. He supports these points well with both hard data and some ballpark guesses. Though these facts and figures can be boring at times they’re mostly presented in a way readers can relate to. Overall, the book is not data-heavy and is an easy and engaging read.

The language is straightforward though often lively with a dash of humour as well. DesRosiers clearly loves what he does and is passionate about the auto industry and this shines through in his writing. But, the book does have a bit of industry lingo and business acronyms which sent me off on some Google searches – OEM, for example, stands for “original equipment manufacturer.”

Also, the book can sometimes be repetitive since there is some overlap between articles. For example, the fact that most vehicles lasted around 150,000 km in the 1960s and now last around 300,000 km today is mentioned often throughout the collection.

Yet, as a whole, a little repetition doesn’t take away from the important insights in this book.

In particular, I found the articles on the recent crash of the Detroit Three automakers the most enlightening. DesRosiers examines how and why the decline happened, what he thinks of how it’s being addressed, what else should be done to improve these manufacturer’s fortunes and how things are likely to play out in the industry. And, while DesRosiers is realistic he also leaves us with the feeling that all hope is not lost for the auto industry.

However, though the older articles give an idea of how past trends are affecting the present, they may not interest everyone. Also, because the articles are not always in chronological order in their respective sections, this might make it difficult for some readers to see how some of the past articles connect to the present.

That small complaint aside, DesRosiers is also not afraid to make controversial statements, resulting in some very interesting arguments.

For example, when leasing was popular for both auto dealers and consumers in the 1990s, he wrote that for most consumers it is a terrible idea. Through solid numbers and examples he shows that leasing a car, while it can be a good idea in the short-term, actually costs more in the long-term than getting a car loan. Prospective vehicle buyers should find this section very useful in figuring out when it’s a good idea to lease.

The more recent articles in the book also have some very compelling points about fuel efficiency.

DesRosiers argues that government targets for fuel efficiency are impossible for automakers to meet by the 2020 deadline. He shows that an improvement of about 10 per cent in fuel efficiency has taken 25 years to achieve in the Canadian auto industry. Therefore, making a greater improvement in 12 years is just not feasible.

His main criticism of these government environmental policies is that they target automakers when consumers are also to blame for poor fuel efficiency. DesRosiers also points out that, considering the weak economy, governments should give automakers a chance to recover before making them tackle fuel efficiency. While environmentalists might not like the suggestion of putting money before fuel efficiency, DesRosiers does have a point. You do need money to invest in clean technology, after all.

In the end, this book has a lot of valuable information about the Canadian auto industry and makes you think about the changes and policies meant to improve it. Whether you want to be a better consumer, want to know what the future holds for the auto industry or you just want something intelligent to read, you’ll likely find something to enjoy in this collection.

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

The Car Industry

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 14, 2010 at 8:00 AM

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

Dennis DesRosiers – July 13, 2010

By Dennis DesRosiers

The Globe and Mail are putting on a “Green Agenda Forum” at the Metro Toronto Convention Centre on Friday morning June 4’th. Green Agenda is a national platform for automotive manufacturers to explain their case on new technologies, regulatory realities and consumer benefits and there will very interesting and exciting presentations from a number of OEMs. The event is hosted by Michael Vaughan and Jeremy Cato who are always entertaining but from a strong knowledge base. I’m the kick-off speaker and will do my best to tell the “REAL” story as to how this will play out over the next few years. I won’t mince my words, I promise. And best of all it is FREE as in it won’t cost you anything although seating is limited.

See attached notice for more details.

Dennis

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

Coming Up on Donna Magazine

In Beauty, book reviews, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Health, Living, Media Writing, Opinion, Technology, Writing (all kinds) on March 14, 2010 at 8:26 AM

Coming Up on Donna Magazine, there will be reviews from books by Dennis Desrosiers, Mikaya Heart and others. Look out for them soon.

The Decade in Review – Part 6 – Entry Level Vehcile Sales‏

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, Writing (all kinds) on January 13, 2010 at 8:48 AM

Dennis Desrosiers – January 13, 2010 – 1

Dennis Desrosiers – January 13, 2010 – 2

Attached are two tables on the entry-level vehicle segments in Canada for 2000 to 2009. One table documents sales by each of the sub-segments within the entry-level market and the other looks at sales by brand.

This is it my friends. The entry-level market defines Canada. Any full line brand that fails in this segment fails in the market. Entry level vehicle accounts for 50.8 percent of total sales in Canada. In some provinces like Quebec, it is well over 60 percent of the market. This is up from only 34.6 percent of the market in the year 2000. Sales volumes peaked in 2008 at 841,147 units and with the serious downturn in the total market, this past year sales dropped back into the mid 700K range. With the number of “B” and ” C” sized vehicles expected this coming decade we also expect this segment to become even more important within the Canadian fabric. It is very possible that this segment could grow to close to sixty percent of sales although this will take a number of years.

Obviously, this segment is the most price sensitive so is the most exposed to a recessionary economy and was one of the segments that were most severely down this past year with an 11.7 percent decline. We expect this segment to outperform the total market as the economy emerges from its problems. Entry-level vehicles also have the highest scrappage rates of any size of the vehicle so when the consumer vacates the market for any length of time we usually see considerable pent-up demand as the fleet on the road age quickly and need replacement. This is the rub from an environmental perspective. Consumers who buy these vehicles get the least amount of lifetime use from them so by doing the right thing from a social policy perspective a consumer actually lowers his value for money. The longest lasting vehicles and thus the best lifetime value are also the least fuel efficient.

But at over fifty percent market share it is also a testament to the environmental friendliness of the Canadian consumer. Vehicle companies offer the most productive in this segment, market this product aggressively and price the product competitively. There is a view by some politicians that the vehicle companies hoist upon the consumer their least fuel-efficient vehicles. The size and growth of entry-level vehicles belies this point of view.

We include in this segment all subcompact and compact cars as well as compact SUV’s and small pickups since both are entry level vehicles within their customer base. Subcompact car share doubled this decade from 3.8 percent of the market to 7.4 percent of the market. Despite the growth in this “B” car segment the compact car segment also increased share slightly growing from 24.6 percent of the market to 26.1 percent of the market. The biggest growth came in the compact sports utility segment which more than tripled in size increasing from only 4.4 percent of the market to 14.5 percent of the market. Yes, Canadians like their SUV’s but they buy the most fuel-efficient ones. The small pickup market is rather tiny in Canada accounting for only 2.9 percent of the market although this sub-segment is also up this decade ( from 1.7 percent share in 2000 ). This segment also shows how responsible Canadian consumers are with many buying into the pick-up truck market at the entry level instead of the full-size level.

Individual brand sales were marked by huge success and or huge failure this past decade. The most successful company from a percentage improvement point of view was Nissan who’s sales in this segment increased by 266.0 percent this decade. They were closely followed by Subaru up 249.8 percent and Hyundai up 185.0 percent and Kia up 137.0 percent. Although Toyota wasn’t the leader in percentage increase they were number one in the entry level market with 135K units and an 18.2 percent share. Honda was in second place with a 12.9 percent share and Hyundai was in third place with an 11.8 percent share. Ford and GM held onto their double-digit market share position with Ford at a 10.7 share and GM at a 10.6 percent share.

GM was the big loser in this segment dropping from first place to fifth place in market position and losing a third of their volume this decade. GM peaked at 153K units but sold only 79K units in 2009 a devastating loss in volume and market share. Most of this loss came in the past year with GM’s sales in this segment down by 43.8 percent. Chrysler also was a major failure in this segment losing more than half their market share a decline from 9.9 percent of the entry-level market in 2000 to only 4.4 percent in 2009 and eight places amongst the various brands. Ford started the decade with an 11.4 share, fell to as low as a 9.0 share but came back strong at decade end and finished with a 10.7 percent share.

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 #:

The Decade in Review – Part 5 – The Number of New Vehicle Dealers‏

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, Writing (all kinds) on January 11, 2010 at 9:28 AM

Dennis Desrosiers – January 11, 2010

Attached are new car dealer counts by brand for the decade. I break out dealer counts by the dealers that are selling primarily luxury brand vehicles from those that are what I call full line dealers. There are a couple of issue with this data though. First, Lincoln and Cadillac dealer counts are not available separate from their parent company totals so I can’t include them in the luxury dealer table. Second, I have nowhere to put Mini and smart dealers so I include them in the full line table of dealers even though they are very narrow in their product scope.

The total number of dealers in Canada declined by 158 store net this past decade. Full line stores actually declined by 197 stores but this was made up a bit by luxury dealers which increased in the count by 39 stores. The luxury segment grew from about 5 percent of sales to about 9 percent of sales this past decade so there was room for additional dealer points.

No surprise but the D-3 collectively lost 441 dealers and there are about another 150 that will be gone by the end of this year. The D-3 dropped from about 75 percent of the market to just over 40 percent of the market and this loss of market share was the root of the loss of dealers. The Japanese added 114 dealers and the K-2 added 67 dealers for a total increase of 211 Asian brand dealers. European brands also added 72 stores.

GM shed the most dealers at 212 stores followed by Ford and Chrysler at 115 and 114 stores respectively. VW also lost 22 dealers, Subaru was down 9 stores and Suzuki down by 6 stores. Daewoo left the market and that accounted for a loss of 41 stores.

Three companies enter Canada, Mitsubishi ( now 77 stores ), smart ( now 49 stores ) and Mini ( now 25 stores ).

Kia added the most dealer points within the group of companies that were in the market the entire decade. Kia added 69 dealers followed by Hyundai with 39 stores.

Within the luxury brands all but Volvo added stores with both BMW and Lexus adding 8 stores. Lincoln and Cadillac also shed stores but do not know their dealer counts.

My thoughts on the day.

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 #:

The Decade of Cars in Review

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Writing (all kinds) on January 7, 2010 at 6:26 PM

Dennis Desrosiers – January 7, 2010 – 1

By Dennis Desrosiers

Attached are sales per dealer for the decade. I sent a note out about these a few days ago but there was a technical error that I wanted to correct. We were never able to get the number of smart car dealers which operate out of Mercedes Benz stores so we always included smart sales as part of the Mercedes-Benz sales per dealers numbers. Mercedes-Benz has now provided me with accurate smart dealer counts so we are able to provide a cleaner analysis with MB broken out separate from smart. We always did break out BMW and Mini so the previous analysis did warp the analysis slightly.

I’ll add in my previous analysis below ( and edited for this change ) so will not repeat myself. But the one additional point I wanted to make was that sales per dealer have NOT fundamentally changed over the decade. They started at 452 units per store and finished at 434 units per store. It peaked at 479 units per store in 2007. This variable doesn’t change much for a number of reasons. First of all, each OEM tends to put more dealers into place as soon as existing dealers start to get bigger. There is still a view in this industry that dealers make too much money and they need to be controlled by adding more stores. I’ve always thought that the best position for any OEM is to allow their dealers to become stinkingly wealthy. What better way to motivate them. But alas most OEMs believe that more distribution is better once sales per dealer grow into certain ranges in any area of the country. Second, there is also a downside control in that if sales per dealer decline than we lose dealers. So over a decade-long period, there will be some change up and or down but at the end of the day it flat lines.

The other thing I noticed was that Lexus was the only brand that increased sales per dealer each year over the decade. Every other brand had at least one year where sales per dealer fell. Three cheers to Lexus … this is very hard to do and implies that not only did Lexus do well in the market each year ( they are the only luxury marque that also increases sales every year ) but they also exhibited the most discipline with their dealer strategy.

Hyundai increase sales per dealer the most this past decade growing from 268 units to 558 units an increase of 290 units per store and Lexus was right behind them with an increase of 288 units per store. I’ll bet anyone that Lexus dealers got more out of their added sales than Hyundai dealers out of their added sales. And finally, GM declined the most moving from 568 units to 408 units a drop of 260 units per store. We generally believe that most GM stores gave their size need about 500 units per dealer to be profitable so at 408 units per store this would also mean that most GM stores were NOT profitable and is at the root of their shedding so many dealers last year and this year.

Another thought for the day.

Dennis

Previous write up follows but understand this write up looks at 2009 versus 2008 and is not focused on the entire decade:

Now that we have final light vehicle sales for 2009 we can calculate Light vehicle sales per Dealer for 2009. This provides a very interesting look at the market from a very different perspective than the OEM. Sales per dealer are one of the better metrics for measuring dealer performance and just like with each OEM there were some very big winners and very big losers in this equation and somewhat different than what the overall sales numbers dictate. The strength of any OEM’s dealer body is currently one of the biggest issues in the automotive sector today and this analysis provides some insights into the performance by brand. Without a healthy and growing dealer body, an OEM inevitably will struggle to get their vehicles to the consumer.

Toyota remained the number one selling dealer network by a wide margin with 786 sales per store. BMW was number two with 618 units per store and Hyundai was number three with 558 units per store. Hyundai moved up eight spots in the rankings.

The biggest winner was Subaru if you measure performance on a percentage change basis. Their sales per dealer increased by 19.8 percent to 265 units per store from 221 units per store or 44 units. On a unit change basis, Hyundai showed the most improvement by a long shot with an increase of 78 vehicles per store. A number of other brands were up nicely … Ford up 39 units, Audi up 38 units, BMW up 37 units, Mercedes Benz up 32 units and KIA up 31 units. The amazing part of the Hyundai and KIA stories is that they increased sales per store so much AND at the same time added 17 and 14 store respectively. This is very hard to do. Ford, for instance, saw a solid increase in sales per store but this was a combination of their sales increasing close to 10 percent and the shedding of 6 dealers. Both trends help the sales per dealer metric.

On the flip side of this equation was Honda with a loss of 139 vehicles per store. This was the worse one year decline in sales per store by any OEM since I first started tracking this variable in 1991. Chrysler was down by 113 units per store and GM was down by 89 units per store. The GM number is surprising because they also lost 98 stores in 2009 so to be down by 89 units with this many dealer closures indicates just how bad a year GM had in Canada. Other underperformers include Toyota down by 90 units, Mazda down by 80 units, Infiniti down by 37 units, Nissan down by 32 units, Mini down by 34 units and Acura down by 24 units per store.

I also divided the market between full line dealer and those that are primarily luxury brand dealers. Interestingly the Luxury brands saw sales per store increased by 12 units while full-line dealers saw sales per dealer decline by 45 units.

My thoughts on the day.

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 #:

Cars and Trucks

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Living, Media Writing, Technology, Writing (all kinds) on January 7, 2010 at 1:02 PM

Dennis Desrosiers – January 7, 2010

Attached are light vehicle sales for 2000 to 2009 by the brand of vehicle sold.

The decade witnessed the start of a startup in Canada of three new vehicle brands, first was Mitsubishi in 2002, the second was Maybach in 2003 and the last was smart in 2004. You could technically include KIA in this list. KIA started in 1999 but their first full year was the year 2000. There also was the loss of one brand. Daewoo left Canada as a stand-alone in 2002 although GM absorbed all their models immediately and sold them through the GM dealer network.

The big winner from a market share point of view was the Japanese. They increased their share from 24.7 percent to 37.9 percent. All Japanese brands except Acura picked up market share with Toyota the big winner increasing from a 7.6 share to a 13.0 share of the market. Lexus also increased from 0.3 percent to 1.1 percent of the market adding to these totals.

The Koreans actually increased more than the Japanese on a relative basis going from a 3.6 percent share to a 10.2 percent share of the market almost a tripling of market share with the big winner being Hyundai who matured as a company and emerged in the decade being a legitimate top 6 company along with the D-3, Toyota, and Honda. In any particular month, any of these five companies can top the sales chart in Canada and it is a toss-up as to who will be in each sales spot by the end of the year. GM and Toyota will fight it out for the number one spot which is shocking in its own right. Ford has an inside track on the number three position but any of the remaining three companies could emerge as the fourth best seller or the sixth best seller. There is a large gap between number six and number seven although this could close this coming decade as well.

The Europeans also picked up a little bit of share this past decade increasing from 5.5 percent of the market to 8.1 percent. Both BMW (0.7% to 1.7%), Mercedes Benz (0.8% to 1.7%) and Audi (0.4% to 0.8%) all doubled their market position not only in share but also in volume with BMW finishing ahead of Mercedes Benz by a whisker. Volkswagen was the volume winner by a long shot with over 40K units sold in 2009

This is a zero-sum game and with these three major groups gaining a lot of shares someone had to lose a lot of shares and as everyone knows that was Detroit. The D-3 declined from a dominant 66.1 percent share to under fifty percent for the first time ever in 2008 and settled in at 43.8 percent by the end of 2009. GM lost 13 points of market share, Ford lost 3 points and Chrysler lost 6 points. Ford was the only one of the three to find a way to stop the erosion by the end of the decade. GM and Chrysler were up and down year by year ( mostly down ) and have still not found a way to stabilize their market position let alone turn it around.

My thoughts for the day.

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 #:

Dennis Desrosiers Thoughts for the Day

In Beauty, Business, cars, Contact Information, Creative Writing, Culture, Education, Entertainment, Environment, Events, Living, Media Writing, Opinion, Technology, Writing (all kinds) on January 6, 2010 at 8:34 PM

Dennis Desrosiers – January 6, 2010

By Dennis Desrosiers

Attached are sales for 2000 to 2009 for passenger cars versus light trucks and for the D-3 nameplates versus the import nameplates although I don’t know why we analysts break out the D-3 from the import nameplates anymore. The three of them are radically different especially after the last 12 months of crisis. Each also is very different from a structural point of view and position and performance in the market. But none the less this is still how the industry looks at things so I’ll also do it this way. I will promise to send you through an analysis by brand in the next day or two that doesn’t have this problem so bear with me.

With the exception of this past year ( 2009 ) the split between passenger cars and light truck sales in Canada was relatively constant at roughly 55 percent passenger car and 45 percent light truck. There as a slight bias toward more light truck share as the decade progressed but it wasn’t until 2009 that light trucks actually took a noticeable market share from passenger cars. In 2009 light truck share grew to 48.8 percent. At the beginning of the decade, most would have forecast light trucks to significantly outperform passenger cars. It never happened. This actually is quite surprising in that the whole fuel efficiency debate centred around the notion ( at least in Government eyes ) of car good .. truck bad. This notion is wrong but is the overwhelming perception of many who write about this industry. But much higher energy prices and a Government machine biased against light trucks ( especially SUV’s ) one would have expected a huge upswing in passenger car sales as energy prices soared and our Governments pushed the fuel efficiency button. In fact, the opposite happened. Canada ended up through the decade with a growth in light truck share. This shows how wrong some of the fundamental notions that evolve about our industry can be. In actual fact the notion of … car good – truck bad .. is highly flawed. There are many light trucks that are more fuel efficient than passenger cars. Indeed if you take out the commercial use light truck which because of their use have no choice but to have more powerful engines then the difference in fuel economy between light trucks and passenger cars is very slight. And that is one of the reasons that consumers bought so many of them.

Another insight from this mix of sales is the power of the consumer. Governments can foist their views onto the consumer all they want but at the end of the day the consumer is much more powerful than any politician and will buy what they want to buy not what some politician tells them to buy. And the vehicles companies simply respond to these consumers needs. They do have a role in shaping consumer thinking but much of the desire of the consumer emanates from their day to day need NOT what any vehicle company says their needs should be and certainly not from what any politician tells them to buy.

Indeed if you look at the second block of data on this chart you will see exactly what I mean when I say that OEMs do not control the consumer but instead respond to the consumer. This second section breaks out the D-3 nameplates from the import nameplates. Despite their serious problems, the D-3 remain incredibly powerful entities in the market and there is no argument that they were the most powerful companies by a wide margin at the beginning of the decade. If OEMs dictated what consumers bought then how is it that the three most powerful players ( the D-3 ) at the beginning of the decade accounted for 66. 1 percent of light vehicle sales but by the end of the decade they accounted for only 43.8 percent of sales.

There is a frightening view in policy circles that any OEM can dictate to the consumer what they should purchase and thus our policymakers put in place a process where OEMs are being asked to make sure certain benchmarks are met. But in reality, our policymakers should be taking on this responsibility NOT any OEM. The OEMs in Canada simply sell to the consumer the products the consumers desire. If the policymakers want consumers to buy the more fuel-efficient product then they need to alter consumer behaviour. And they have tools at their disposal to do exactly this with the most powerful tool being the tax system and the regulatory system. They could legislate old gas guzzlers off the road for instance through an inspection program like they do in many countries around the world. But politicians refuse to take responsibility because they don’t want to tell consumers or better put … FORCE … consumers to do something they fundamentally don’t want to do. After all, they might lose their vote. So they vacate this responsibility and push it onto the OEMs to do their dirty work for them. But the OEMs little to no control over the consumer and thus not a lot gets done.

I don’t deny that the OEMs have some responsibility but if our political masters want more fuel efficiency then they also should take more responsibility for this agenda item.

Sorry to get off topic a little but my mind wanders.

Back to the D-3 import nameplate decade of sales. It was needless to say a very difficult decade for the D-3. All three lost market share which I’ll highlight in more detail in one of my next e-mails. But GM declined from 30.5 percent of the market to 17.4 percent, Ford’s share was up in 2009 but they still declined from 18.2 percent of the market to 15.4 percent and Chrysler declined from 17.3 percent of the market to 11.2 percent. Collectively the D-3 lost 22.2 points of market share a record for any one decade. Import nameplates grew from about 525K units in a 1.55 million market to about 820K in a 1.46 million market an incredible performance that ultimately led to the near bankruptcy in Canada of both GM and Chrysler. The same happened in the US and it did result in Chapter 11 filings.

I’ll send some more decade level information out over the next few days and weeks and take a very close look at the decade through multiple windows. I’ll also try to avoid getting into these rants about our policymakers.

My thoughts for the day.

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
www.desrosiers.ca

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