No matter how many new or improved models they offer Canadians in the next couple of years, a recent study from J. D. Power makes clear, none of
the auto firms predicting wildly optimistic (50, 100 or even 200 percent) growth will meet their projections.
While this will be bad news for auto executives who have to explain their failures to their masters in Germany, Japan and Korea, it's excellent news for Canadian consumers.
After all, too much product in pursuit of too few consumers is the classic recipe for a buyers' market, and that's clearly what's going on in Canada right now.
In an effort to double or even triple their recent sales levels, many smaller companies have created an apparently endless stream of offerings for segments they were never in before.
According to the J. D. Power study, there'll be 73 new entries to the Canadian market between 2006 and 2008, at the rate of about two dozen every year. That would bring the total number of models available for consumer consideration to about 350.
All of these extra models were meant to increase dramatically the sales results for each company in Canada, resulting in an annual volume of about 2.1 million new vehicles a year. That number is about 500,000 more than the country's ever been able to accommodate, and nearly 400,000 more than Power is projecting for 2012.
In an effort to meet the sales projections these companies have budgeted for, they're going to have to resort to serious incentives of some kind.
BMW is already on that particular wagon, says J. D. Power. In fact, the German firm is already at the top of Canada's incentive-granting chart, way ahead of anything any of the other companies are offering.
In September, BMW spent $4,516 in incentives on each one of the units it sold. That's well above the average of $1,518 per unit for the entire industry, and far ahead of the second most generous company -- Ford at $3,177.
The Bavarian car company has been offering those levels of incentives for three months, J. D. Power says, going from $4,280 in July to $4,391 in August to $4,516 in September. The industry average, on the other hand, has been decreasing, from $1,649 to $1,782 to $1,518.
Those incentives and a brand new 3-Series model probably explain BMW's increase in volume so far in 2005, since companies that haven't been so liberal with the cash handouts have seen their sales drop.
The Mercedes-Benz division of Germany's DaimlerChrysler AG, for example, added the entry-level B-Class model recently, but car sales actually fell in October, as the C-Class decline to 171 from 387 in 2004 more than made up for the 187 B-Class models sold. And for the first 10 months of the year, Mercedes car sales are down to 7,278 from 8,344.
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| J.D. Power and Associates |
While this will be bad news for auto executives who have to explain their failures to their masters in Germany, Japan and Korea, it's excellent news for Canadian consumers.
After all, too much product in pursuit of too few consumers is the classic recipe for a buyers' market, and that's clearly what's going on in Canada right now.
In an effort to double or even triple their recent sales levels, many smaller companies have created an apparently endless stream of offerings for segments they were never in before.
According to the J. D. Power study, there'll be 73 new entries to the Canadian market between 2006 and 2008, at the rate of about two dozen every year. That would bring the total number of models available for consumer consideration to about 350.
All of these extra models were meant to increase dramatically the sales results for each company in Canada, resulting in an annual volume of about 2.1 million new vehicles a year. That number is about 500,000 more than the country's ever been able to accommodate, and nearly 400,000 more than Power is projecting for 2012.
In an effort to meet the sales projections these companies have budgeted for, they're going to have to resort to serious incentives of some kind.
BMW is already on that particular wagon, says J. D. Power. In fact, the German firm is already at the top of Canada's incentive-granting chart, way ahead of anything any of the other companies are offering.
In September, BMW spent $4,516 in incentives on each one of the units it sold. That's well above the average of $1,518 per unit for the entire industry, and far ahead of the second most generous company -- Ford at $3,177.
The Bavarian car company has been offering those levels of incentives for three months, J. D. Power says, going from $4,280 in July to $4,391 in August to $4,516 in September. The industry average, on the other hand, has been decreasing, from $1,649 to $1,782 to $1,518.
Those incentives and a brand new 3-Series model probably explain BMW's increase in volume so far in 2005, since companies that haven't been so liberal with the cash handouts have seen their sales drop.
The Mercedes-Benz division of Germany's DaimlerChrysler AG, for example, added the entry-level B-Class model recently, but car sales actually fell in October, as the C-Class decline to 171 from 387 in 2004 more than made up for the 187 B-Class models sold. And for the first 10 months of the year, Mercedes car sales are down to 7,278 from 8,344.