New wave of buyers fuels surge of GM sales in Canada

As a champion rodeo rider, Rob Bowers felt a lot of loyalty to Dodge, the Fiat-Chrysler division that supported his sport.

"Dodge [now Ram] was all I'd ever driven for rodeo for 15 to 18 years," he said. "It's been a big part of my sport."

When he retired from the body-punishing sport of bareback and bull-riding, he was ready for a change. So, two years ago, he bought a GMC Sierra SLT.

Two years and 160,000 kilometres later, he traded up to a Chevy Silverado High Country. For him, it's the perfect vehicle for his new job as a driver who makes long-haul deliveries of trailers. He's racked up 103,000 kilometres on the new truck since February in a job that keeps him on the road for up to the legal limit of 13 hours a day.

"I really like the style and comfort," he said.

Bowers represents a new wave of buyers who are fuelling a surge in General Motors vehicle sales. This year has seen spectacular gains for the once-beleaguered auto maker. Although the pace of growth cooled last month, overall year-to-date sales in Canada are up 14.6 per cent with 232,566 units sold by the end of September, just 14,000 units behind Ford of Canada's 246,105. "They have a shot at being No. 1 this year," auto analyst Dennis DesRosiers said. "And they'll give everyone a run for their money next year."

Just nine years distanced from its Chapter 11 bankruptcy protection filing in the United States, GM is staging a remarkable comeback. GM's market-share gains have come largely, but not exclusively, at the expense of the other two Detroit-based companies, DesRosiers said: "They've really beat up on Chrysler this year, and a little bit, Ford."

GM's September sales were up 7 per cent over September, 2016, while Ford's gain was 2.4 per cent. Fiat-Chrysler was down 6.1 per cent for the same month, according to DesRosiers Automotive Reports. All four of GM's divisions have seen increases in retail sales: GMC truck division (up 22 per cent year to date); Buick (17.7 pr cent YTD), Cadillac (16.9 per cent YTD); and Chevrolet (15.9 per cent YTD). In August, GM's sales increased 28.5 per cent compared with August, 2016, while Ford's sales were off 5.8 per cent and Fiat-Chrysler down 9.0 per cent for the same month, according to Global Automakers of Canada.

"They're on a roll," DesRosiers said. "Frankly, it's nice to see."

John Roth, GM Canada's vice-president for sales, service and marketing, said the increase is the outcome of a strategy initiated five years ago. "The strategy combines solid marketing programs, a strong dealer network and great products," he said in an e-mail.

DesRosiers, however, said the market success is the result of "quite complex" factors. "Top of the list is product, product, product," he said. "GM has the best product line it's had in decades."

It is also significant that GM has aligned its products with market demand, particularly in light trucks, he said.

Carlos Gomes, an economist who authors the monthly Scotiabank Global Auto Report, said the growth of light trucks – a classification that includes SUVs and crossovers – is a trend that began in North America but is spreading across the world.

"It's phenomenal," he said. "Even in China, we're seeing growth of over 40 per cent."

DesRosiers said GM is also benefiting from the relative sales softness in the U.S. market. "When the U.S. is soft, Canada has better access to product," he said.

GM has been playing two other big cards: pricing and its dealer network. In its light-duty pickups, in particular, GM has offered significant price discounts. "GM is willing to put a lot of money on the windshield," DesRosiers said.

Its dealership network is also located where auto sales growth is strongest. "It's the West that's leading Canada this year," especially Alberta, DesRosiers said.

DesRosiers says all auto makers experience a cadence to their success and it is difficult to predict how long GM's surge will last. Over a course of several years, products get stale and consumers' tastes shift. And unpredictable quality issues can pop up, such as the faulty seatbelts and airbags in some models of Hondas, Toyotas, Nissans and Subarus.

"Look at the Japanese," he said. "They've had a couple of stumbles."

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