TORONTO (Reuters) - New auto sales at both Ford Motor Co of Canada (F.N) and Chrysler Canada accelerated in May, the companies said on Friday, boosted by demand for fuel-efficient vehicles and trucks.
The numbers look stronger than expected, said Scotiabank economist Carlos Gomes, but there is some distortion in the comparison to an extremely weak month of sales a year earlier. Sales are also bouncing back from a “sluggish” April, he said.
“Nevertheless, it seems that the numbers would be coming in a little bit better than people would be expecting,” Gomes said.
“Part of it might be incentives playing a factor. With Ford and Chrysler, they seem to be battling it out for the first place in the Canadian marketplace so I think that you might be seeing some incentive activity.”
Ford said it ranked as Canada’s top auto-seller for the month and year to date, as May sales jumped 27 percent higher than the same period last year.
Car sales rose 30.5 percent, with increases from Ford Fiesta, Fusion and Taurus, while truck sales jumped nearly 26 percent. Overall vehicle sales rose to 32,338 for the month from 25,448 in the same period last year.
“May was a good growth month for Ford of Canada, with strong sales across the entire lineup of cars, utilities and trucks,” said Ford of Canada chief executive Dianne Craig.
Total vehicle sales year-to-date are up 4.3 percent over the same period in 2011, Ford said. Car sales in that period have climbed 8.6 percent, while truck sales rose 2.9 percent.
Chrysler Canada, whose U.S. parent is controlled by Italy’s Fiat FIA.MI, said May sales increased 7 percent to 26,218 from 24,406 in May 2011, lifted by record-setting demand.
The company set May sales records for its Jeep Wrangler, Dodge Journey, Chrysler Town & Country, Chrysler 200 and Fiat 500. Ram truck sales set an all-time record.
“We have always been strong on the truck side of our business,” said Chrysler Canada Chief Operating Officer Dave Buckingham. “But to see such strong consistent sales results from our fuel-efficient cars demonstrates the sustainability of our success.”
Year-to-date, overall sales are up 8.7 percent, reflecting a 37 percent jump in car sales and 3.7 percent increase in truck sales.
Toyota Canada (7203.T) said monthly sales of 19,810 vehicles represents a 65 percent increase from last year, when it was recovering from the effects of a tsunami in Japan. Sales for most Toyota and Lexus models made gains, underscored by record growth for certain hybrid vehicle modes and Toyota trucks.
But not all the auto sector’s news was positive on Friday, as U.S. sales were weaker than expected, suggesting demand may have slowed from the strong pace of the last four months. <IDn:nL1E8H11N1>
Some industry officials said warmer weather earlier in the year may have pulled demand forward. Falling prices for fuel may also have reduced pressure on consumers to replace gas-guzzlers with more efficient vehicles.
As well, General Motors Co GKM.N said that it expects to close one of the two lines at its Oshawa, Ontario, assembly plant by June 1, 2013. <IDn:nL1E8H19ID>
The consolidated assembly line, which employs about 2,000 workers, was originally expected to cease production in 2008, GM said in November 2005. But production was extended due to market demand for the Chevrolet Impala and Chevrolet Equinox crossover, GM said.
“It is too early to predict accurately the job impacts related to these scheduling actions which will unfold over the next year as some employees may elect to retire and others will be on indefinite layoff,” General Motors of Canada communications director Fayed Roberts told Reuters in an email.
Reporting by Susan Taylor; Editing by Sofina Mirza-Reid and James Dalgleish