Ford Vehicle

Karen Bleier/AFP/Getty Images Ford Motor Co. said Thursday it outsold GM in Canada in June, the first time that’s happened in 50 years. TORONTO — General Motors Corp.’s near-death experience is testing its performance in dealer showrooms as Canada’s perennial volume leader was outsold in June by Ford Motor Co. for a second time in just six months. Ford beat GM again in June following an initial pass in February. But this time, Ford also bested all rivals to take the sales crown for the first time in 60 years. The last time it accomplished that, its Mustang sports car didn’t even exist. "This is a real big deal for us," said Ford of Canada president David Mondragon. "We feel good about our positioning. But no one at Ford is waving any type of flag of victory. This is a difficult time." During its first full month under bankruptcy protection in the United States, GM said its Canadian arm sold 22,334 vehicles, a 31% decline over June 2008. Ford, the only Detroit automaker to avoid a court-supervised reorganization, said it sold 27,408 cars and trucks, beating its rival by roughly 5,000 units. Analysts cautioned that GM fared poorly partly because it cut production at a number of assembly factories in North America to more tightly control inventories and reduce stock. That in turn lowered sales to vehicle rental companies and other fleet customers, which may be reversed in the months ahead as production ramps back up. But they also argued that the negative image of a company in turmoil, rescued from almost certain liquidation with US$60-billion in loans from the Canadian and U.S. governments, is weighing on GM while benefiting Ford. "Mostly I think Ford is just getting more favourable reaction right now than GM and Chrysler, having stayed free of government financial aid," said Tony Faria, an auto specialist at the University of Windsor’s Odette School of Business.
"[There is a feeling] that these companies are unstable, in financial difficulty, are not out of the woods by any means. And that’s going to stay with them for a while." The industry’s sales slump continued last month as auto manufacturers tallied a 13% decline overall. It was the eighth consecutive year-over-year sales drop. If first half sales of 721,018 units hold, automakers will sell just over 1.4 million vehicles in 2009. "We have a longer journey out of this mess of a market than anyone would care to admit to," said analyst Dennis DesRosiers. There were some stark contrasts in performance among manufacturers. Hyundai Motor Co., riding a weak Korean won that has allowed it to lower prices, tallied a 26% gain in June. Audi sales rose 52%. On the flip side, Honda and Toyota tumbled 20%. Chrysler reported its second sales crash in as many months, selling half the number of vehicles it sold in June 2008. This is the second time this year that GM, the traditional sales leader in Canada, has been outsold by rivals on a monthly basis. In February, both Ford and Chrysler sold more vehicles than GM. GM retains the leadership position as measured by year-to-date sales. Ford is about 25,000 vehicles behind, roughly the equivalent of one month’s worth of volume. "Our June performance reflects the overall softness in Canadian auto sales," Marc Comeau, GM of Canada’s vice-president of sales, said in a statement. Automakers are expecting stronger second-half volumes in North America, highlighted by Ford and Chrysler’s plans to hike third-quarter continental output by 5%, Scotiabank economist Carlos Gomes noted.

Canadian assembly plants will be the main beneficiaries of those planned production increases, he said. Ford has been able to avoid bankruptcy and tapping state aid because it borrowed US$23-billion three years ago before credit markets froze. Its shares have more than doubled this year, closing Thursday at US$5.89 on the New York Stock Exchange.