High fuel prices help stimulate demand for smaller fuel-efficient passenger cars

TORONTO – Canadian auto sales rose a modest 2.8 per cent in March as consumers bought more new cars than a year earlier, offsetting a slight decline in truck sales.

Automakers sold some 157,750 vehicles for the month, compared to 153,485 in March a year ago, according to data from DesRosiers Auto Consultants.

Part of the increase was due to the sales of smaller, fuel-efficient passenger cars as fuel prices continue to rise.

Out of the “Detroit Big Three” automakers – Chrysler, Ford and General Motors – Ford Canada was the best selling automaker last month, wresting the title back from Chrysler.

Ford Canada sold 24,690 vehicles in March, with particularly strong interest in the Ford Focus, Edge and Flex, but the overall volume was a decline from 25,526 in March 2011.

“There was a slight decline in March, however it was still a very strong month considering that last March we set a 12-year record,” said Dianne Craig, president and CEO at Ford of Canada.

Numbers for small car sales are even more pronounced south of the border.

Last month in the United States, consumers’ thirst for small and fuel-efficient cars was a prime factor in driving light car and truck sales nearly 13 per cent higher than a year ago.

General Motors Co. said it sold more than 100,000 cars that get 30 or more miles on a gallon, its highest ever and nearly half of the 231,052 vehicles it sold, according to researcher Autodata Corp.

“Consumers aren’t being deterred by the high gas prices,” said Michael J. Jackson, chief executive of AutoNation Inc., a Fort Lauderdale, Fla., dealership chain. “If anything, gas prices are bringing people into showrooms because they’re looking at all the new vehicles that get 30 or 40 miles per gallon and they want to buy.”

GM said compact and subcompact car sales in the U.S. were up a combined 62 per cent thanks to the new Chevrolet Sonic subcompact.

GM sold 8,251 Sonics in March. Sales of the Chevrolet Cruze small car were up 20 per cent.

Still, automobile analyst Dennis DesRosiers says consumers start to change their minds once the price of gasoline falls.

“Instantly whenever gas prices go up, people make the move to buy smaller cars,” said DesRosiers. “But when gas prices go down, consumers return to buying large vehicles.”

According to DesRosiers Consultants Inc., the purchase of hybrid/electric vehicles still falls short.

Canadian consumers in the past 12 years have purchased a total of 17,000 hybrid/electric vehicles. In that same period, more than 22 million gas-powered vehicles were sold.

With files from The Canadian Press