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Auto Sales Slide Down in Canada
Jan 03, 2008

Canadian automobile manufacturers are facing a turbulent phase with gradually declining sales figures, with a 5% drop this November, despite deploying all possible strategies to attract customers.
 
Auto manufacturers in Canada are disheartened that people’s pockets were filled with incentive money in November 2007, but sales figures slid down by 5% in comparison with the corresponding month the earlier year. Sales dwindled to a low of 117,758 units as against 123,754 units in November last year, as per the news published by Theglobeandmail.
 
Automakers made all possible attempts last November to attract customers. They sweetened their holiday incentives by giving away loads of extra savings. Cash-back deals, a 1% reduction in federal taxes on goods and services, zero-interest automobile financing, annulment of down payments, and a horde of other such lucrative methods were tried out. But none of the strategies could lure consumers into buying new automobiles.
 
Some industry experts opine the reason behind the low Canadian auto sales to the consumer perception that transaction prices are relatively lower in the US. Besides, many consumers are in the hope that prices will further decline.
 
The other primary and most frightening reason for the sales decline in automobiles is the rapidly increasing Canadian dollar. Therefore, automobile makers in Canada will be under great pressure to offer competitive prices to consumers in the wake of the upwardly mobile dollar.
 
On account of the Canadian dollar shooting up, three auto manufacturers of Detroit, namely Chrysler, General Motors and Ford, have sliced their annual output in North America by nearly 1.9 Million vehicles in the last three years. More cuts are anticipated, putting the Canadian automobile assembly plants in serious trouble. In the meanwhile, some 6,000 jobs in this sector were done away in the first half of 2007.
 
This has slowed down the automobile market competition, leaving consumers with lesser choices. Other companies are rolling back from the market and are struggling to survive in the hostile Canadian auto sector.
 
A RNCOS Research Analyst said, “The sustained low sales have totally demoralized Canadian automakers. Auto manufacturers adopted all possible strategies to lure the consumers, but to no result. To meet the crisis, auto manufacturers need to be given emergency loans and tax reliefs for continuing manufacturing. Tax incentives should also be introduced in the market to sustain the competition.”

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