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Chrysler tops Ford in light truck sales

Chrysler Group LLC, benefiting from demand for its fuel-efficient crossover sport-utility vehicles, overtook Ford Motor Co. as the biggest seller of light trucks in Canada this year.

Sales of light trucks, a category that includes pickups, minivans and SUVs, grew twice as fast as total auto deliveries in Canada in the first half, helped by growth in construction jobs. Chrysler led deliveries last month for the first time since January, winning by a wide enough margin to snatch the crown for year-to-date sales.

Purchases of Chrysler’s Dodge Journey model, which guzzles less gasoline than a traditional truck-based SUV, increased more than Ford’s Escape or General Motors Co.’s Chevrolet Equinox. Those gains put Chrysler within less than 4,000 total deliveries of becoming the overall No. 2 automaker in Canada, where a growing economy is expected to lead to a 2.6 per cent increase in sales this year industrywide, according to Scotia Capital Inc.

“People who are getting jobs are opting for practical vehicles such as a crossover to get better mileage than a traditional SUV, said Carlos Gomes, an economist at Scotia Capital.

“You have the construction sector holding up very well, and that is positive for the pickup segment.”

In total vehicle sales, Chrysler gained 1.6 percentage points of market share to 15 per cent in the first half of 2011 from a year earlier, according to DesRosiers Automotive Consultants Inc. GM lost 0.2 points to 15.5 per cent, and Ford led with 17.4 per cent of the Canadian market. Ford eclipsed GM as Canada’s topseller last year for the first time in decades.

Canadian sales may climb 40,000 this year to 1.59 million, about 60,000 fewer than the nation’s 2007 pre-recession peak, said Gomes.

High fuel prices led many consumers to gravitate toward compact cars and car-based SUVs, commonly called crossovers, for their fuel efficiency, Gomes said.

Light-truck sales in the first half grew more than twice as fast as Canada’s industry average of 2.7 per cent over the same period last year.

The category has made up about 85 per cent of Chrysler’s sales since the beginning of 2010.

As SUVs’ fuel efficiency improves, buyers are “bleeding from the midsize car segments over to compact utilities or minivans,” said Ryan Robinson, director of automotive practice for J.D. Power and Associates Canada in Toronto. “If you’re going to offer similar kinds of fuel economy with greater space, that’s obviously going to attract people.”

Chrysler’s Dodge Journey sales increased more than 50 per cent to 16,069 in Canada. GM’s Chevrolet Equinox sales rose 31 per cent to 12,175, and Ford boosted Escape sales five per cent to 23,183. DesRosiers labelled those models “intermediate SUVs” in a July 11 report and said the segment grew 21 per cent.

There were only a few Journeys on the lot of Steve Dennis’s Chrysler dealership in Winnipeg on July 7.

“I probably did undershoot the market,” he said in a telephone interview. “I won’t make the mistake of running out again.”

Dodge Grand Caravan minivans, Ram pickups and Jeep Wrangler SUVs, as well as the Journey, reported best-ever June sales in Canada. “This is the best retail June sales month since 2005,” Dave Buckingham, Chrysler Canada’s chief operating officer, said in a July 4 statement. Its 23.2 per cent of the light-truck market is better than any yearly total since 2002, Jordan Wasylyk, a spokesman, said in an email.

Light-trucks surpassed passenger cars in 2010 sales for the first time in more than a decade and composed 55 per cent of the market in the first half of this year.

Passenger cars outsold light trucks in the U.S. in the first half of 2011 with 51 percent of the world’s second-largest automobile market this year, unchanged from a year earlier.

Crossovers were the largest segment of the U.S. auto market in the first half of 2011, accounting for more than one-sixth of sales, according to Autodata Corp. Pickup sales grew slower than GM expected, causing its inventory to swell to 122 days’ worth, Bloomberg News reported July 5.

A sour U.S. economy may stymie sales growth in Canada, said Michael Hatch, chief economist for the Canadian Automobile Dealers Association.

“There are a lot of sectors and industries here that rely on U.S. demand,” he said.

Dennis, the dealer in Winnipeg, said he is looking forward to selling the Fiat 500, Chrysler Group’s only subcompact car.

Dodge and Chrysler brand passenger cars accounted for 15 per cent of sales at his dealership so far this year.

Ford reported the most June sales in 22 years with a 32 per cent increase in passenger cars, and GM’s Chevrolet Cruze outsold every category of vehicles in the automaker’s lineup except for full-size pickups and small SUVs.

Compact cars were the topselling segment at 23 per cent in 2010, compared to 15 per cent in the U.S., according to DesRosiers and Autodata.

Increasing supply of the Honda Motor Co.’s Civic and Toyota Motor Corp.’s Corolla, after production was hindered by Japan’s March 11 earthquake, should further boost sales of compact cars, J.D. Power’s Robinson said.

“In the Canadian market, you need a strong lineup at the smaller end,” he said.

http://www.timescolonist.com/

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