Wednesday, August 12, 2009

Quebecers turn noses up at middle of the road

Richard Martin (left) and his partner Ian Obidniak established Montreal Auto Prix that promises the cheapest prices in Canada for vehicles.Photograph by: MARIE-FRANCE COALLIER, Gazette

Quebecers are distinct in their car-buying habits, choosing economy and luxury over middle-of-the-road.

"The two extremes are functioning well here," says Renée Cardinal, senior adviser for communications and marketing at the 226-member Montreal Automobile Dealers Corp.

While Quebec remains the Canadian leader in fuel-efficient "but fully loaded" subcompacts, she said, it's also helping drive sales of some premium brands like Mercedes-Benz and Audi.

Cardinal said the market share being lost by the Big 3 North American manufacturers - General Motors Co., Ford Motor Co. and Chrysler Group LLC - is being picked up by many other carmakers.

"There's not just one big winner," she said, pointing to Korea's Hyundai Motor Co. and Kia Motors Corp. in particular at the lower end of the scale and Germany's Mercedes-Benz and BMW at the high end as examples.

Hyundai Auto Canada Corp. continued its record-breaking national sales trend of double-digit year-over-year rates so far in 2009 with its best-ever July - up more than 37 per cent.

"Sales figures like these are not a passing fad," Hyundai Canada president John Vernile wrote in a recent statement.

"July marked seven straight months of sales increases for this company, and if you look at 2008, we were up almost every month then, too," Vernile added."This success isn't a fluke.

"It is the result of an automotive company providing what people want at the price they can afford, topped off with award-winning quality and gorgeous design."

Those are inviting numbers for Groupe Ray Monahan, which has invested $11 million to build the St. Laurent Hyundai dealership scheduled to officially open in early October.

Its sales department started up in temporary trailer offices Aug. 3, and president Roger Desautels III said yesterday "the phones are ringing more and more every day."

Desautels, vice-president and general manager of the group that also operates Boulevard Dodge Chrysler Jeep in St. Laurent and Montmorency Ford in Brossard, expects to sell 1,000 Hyundais a year in the new fully enclosed dealership that will hold more than 550 vehicles.

Kia Canada Inc. in July recorded its third consecutive month surpassing the 5,000 mark in sales across Canada, up 29.6 per cent over the year-earlier period. Kia is experiencing the greatest results in its 10-year history in Canada.

Guy Hazan considers it the best career move he ever made when he opened a Kia franchise in Pierrefonds a year ago. Before that, he had been a Mercedes-Benz dealer, then a GM dealer.

"It's amazing, I'm doing tremendously well," said the president and general manager of Kia West Island. "It's much, much, much more than I expected."

The lot began operating in July 2008, but "it has been rock 'n' roll" since the official opening in mid-March with what Hazan called "killer (sales) numbers."

Monthly sales projections of 30 or 40 vehicles a month actually turned out to be 50 or 60.

At Automobiles Silver Star Montréal Inc., a Mercedes dealership, general sales manager Rob Girouard said he has "never seen anything like this. It's the best year ever since I'm here."

With the new entry-level GLK compact SUV, revamped C-Class compact executive car and B-Class compact MPV, he said "people are opening their eyes to our brand and realizing they can afford a Mercedes."

There are more first-time customers coming to the showroom, "people we've never seen before with lower-end trade-ins, and the leasing market in Quebec is on fire," Girouard added.

Joel Segal, president of Decarie Motors Inc., said he sees the high-end market improving and traffic in the showroom picking up.

"Jaguar's new products have really captured the attention of the marketplace, and Range Rover (the luxury SUV produced by Land Rover in Britain) sales keep trucking along and are up a little over last year," Segal noted.

While Aston Martin and Bentley sales are down slightly at Decarie Motors, Segal said there's a marginal increase overall among the four brands carried there.

Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc., said a few luxury companies like Audi and Volvo "are going gangbusters," while others like Saab (2009 sales down 42.9 per cent from 2008) and Land Rover (year-to-year sales down 26.7 per cent) "are in the toilet."

mking@thegazette.canwest.com

Sales Numbers

July 2009/2008 Increase / Year To date / Year to Date Market Share

Audi: 40.3% / 20% / 0.5 %

Volvo: 39.4 % / 2.4% / 2.2 %

Porshe: 37% / -5.2 % / 0.1 %

Lexus: 13.9% / -3.7 % / 0.9%

BMW: 12. 1% / -1.3% / 1.4%

Mercedes-Benz: 9.5% / 16.5% / 1.2 %

Hyundai: 37.8 % / 23.9% / 4.9%

Kia: 29.6% / 20.4% / 2.2%

Mitsubishi: 18.7% / 3.3% / 1.1 %

Source: DesRosiers Automotive Consultants Inc.

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