The Canadian International Auto Show (CIAS), Feb. 17-26, can provide a bit of a reality check on industry health.
CIAS General Manager Jason Campbell says there’s 360,000 square feet of floor space for the show (about 33,000 square metres) and that he could sell 500,000 if he had it. There are dozens of vehicle debuts this year and zero manufacturer no-shows. That indicates healthy marketing budgets, which implies that companies are flush with cash and new product. That’s positive news.
But what about 2016’s record sales numbers? They’re significant, but they don’t necessarily equate to healthy bottom lines nor do they shine light on the obstacles of the next 12 months and beyond. It’s just one number, like judging a vehicle solely on its price or its zero-to-100-km/h time. In some cases, being obsessed with pushing metal to show good sales numbers actually creates problems.
In Canada, leasing is regaining popularity, which of course helps move more vehicles on the front end, but on the back end, a tidal wave of lease returns are predicted to flood the market. That could collapse residual values, driving up the cost of leasing, which will affect sales. Is anyone seriously looking at the big picture, here?
Well, that’s a great question to ask Ford, and really the Detroit Three automakers as a whole, when it comes to putting all their eggs in one basket: trucks. Canadians are, for whatever reason, bonkers for trucks. As if to prove the point that sales volume doesn’t really matter to industry health, based on dollars per sale, which would Ford rather sell, 100,000 F-150 pickups or 100,000 Focuses? It’s easy math and shows why the company appears to be just as hooked on trucks as its buyers. Ford sells more F-150s in Canada than every other vehicle it makes, combined, and the scale continues to slide.
It’s all rosy for now, but Ford needs to address tough questions about how it intends to replace a large chunk of truck sales — its cash cow — with hybrids and electrics. Where’s its version of the Chevy Bolt? The irony is that auto shows such as CIAS are flush with green technology that doesn’t even remotely reflect the current buying reality or Ford’s business model in Canada.
For now, let’s enjoy CIAS and its debut vehicles, but with an eye to a future that’s going to deal the ultimate reality check for the industry.