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Auto sales surge 9% on rebates

Tony Van Alphen From Toronto Star online | May 03 , 2007

The Canadian auto industry has smashed its sales record for April with a boost from the federal government's rebate program for fuel-efficient vehicles.

Sales and leases of new cars and light trucks jumped 9 per cent, or almost 14,000, to 168,984 vehicles last month from the same period last year, auto manufacturers reported yesterday.

That easily topped the previous record for the month in 2002 by almost 4,000 vehicles.

Auto sales for the first four months of the year are now up 3.7 per cent, or 18,000 vehicles, to 507,944 vehicles from the corresponding 2006 period.

Industry watchers said Ottawa's new program in March's federal budget contributed to the strong gain. The program gives motorists up to $2,000 if they buy a new auto that meets strict fuel efficiency criteria. It also penalizes buyers of some gas-guzzling vehicles up to $4,000.

"It certainly helped," said analyst Dennis DesRosiers. "Since the Canadian consumer primarily buys small fuel-efficient vehicles, this incentive helped propel the market to its best April on record."

In Ontario, consumers can also get tax credits of up to $2,000 for eligible fuel-efficient models.

DesRosiers suggested consumers buy a vehicle that qualifies for the federal rebate as soon as possible because it is costing Ottawa a lot of money and won't last.

Some auto makers experienced major increases in sales of fuel-efficient vehicles that qualified for the rebate. For example, sales of the Yaris subcompact sedan that includes a $1,000 federal rebate shot up 67.8 per cent to 2,511 last month.

Sales of the Ford Escape hybrid sport-utility vehicle, which qualifies for a rebate of up to $2,000, almost tripled to 98 last month.

DesRosiers also noted sales of Chevrolet Impala soared 54.7 per cent. It's one of the few mid-size models using environmentally friendly ethanol-85 and qualifies for a $1,000 rebate.

The big increase in Impala business fuelled a turnaround at General Motors of Canada Ltd. last month after significant monthly declines. GM's light vehicle sales jumped almost 16 per cent, or more than 6,000, to 44,651 despite two less selling days than April 2006.

DaimlerChrysler Canada Ltd. reported sales climbed 6.2 per cent to 22,514 in April – the ninth consecutive month the auto maker has posted a gain.

Ford Motor of Canada Ltd. said sales slipped 3.4 per cent to 21,973, though truck sales rose.

Meanwhile, booming Toyota Canada Inc. posted another record for April as sales inched up marginally to 21,243 on the strength of the Lexus luxury brand. Sales of Toyota brand vehicles dipped 1.2 per cent.

Business at Honda Canada Inc. improved 1 per cent to 15,117, while volumes at Mazda Canada Inc. shot up 27 per cent to 10,341 in April, the biggest sales month in the company's 39-year history here. At Nissan Canada Inc. sales soared 30 per cent to 7,455.

Among other strong performers, Hyundai's sales rose 11.2 per cent to 7,235; Volkswagen's volumes soared 22.5 per cent to 3,501; Mercedes-Benz deliveries jumped 14.6 per cent to 1,530 and BMW's business climbed 16.4 per cent to a record 2,258.

Sales in the U.S. dropped 7.6 per cent to 1.34 million in April from the 2006 period. Every major manufacturer reported declines.

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