Canada's eco-Auto program backfiring, pickup sales increase
A new program to urge Canadian drivers to downsize to more fuel-efficient vehicles from large gas-guzzling SUVs has had the unwarranted effect of lifting sales of pickup trucks. The new ecoAUTO Rebate Program offers a rebate ranging from $1,000 to $2,000 for people who pick up certain fuel-efficient vehicle, but slaps a $4,000 excise tax on fuel-heavy SUVs and sports cars.
Of course, there are many out there who are forced to use heavy pickups for their businesses, so to appease them, the Government exempted the excise on pickups. According to research released by DesRosiers Automotive Consultants, the program has been driving up sales of new pickup trucks since its introduction in March as a result. New car-buyers who previously wanted an SUV are now switching to pickup models. Take Ford's Ranger, sales are up 18% for the first seven months of the year, and that trucklet ain't exactly a spring chicken.
Things aren't expected to change anytime soon because the Government isn't about to admit it made a mistake. Now, where have we heard this before?
[Source: The Truth About Cars]
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Reader Comments (Page 1 of 1)
Harry Ariola 10:48AM (8/21/2007)
Wait, so you're saying a government program was established to manilpulate the free market and it didn't work? Impossible!
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smspam 10:51AM (8/21/2007)
Unintended consequences strike again. Arizona went through this a while back...
http://clubs.hemmings.com/clubsites/capp/Dec2.html
My $0.02 is if you want to reduce the consumption of fossil fuels, increase their price with a gas tax. These elaborate supply side schemes to favor some vehicles over others always seem to extract maximum cost for minimum (if any) benefit.
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fadetowhite 12:19PM (8/21/2007)
There is a big trend here in Canada towards more fuel-efficient vehicles. This article is a bit misleading, and I was glad to see some of the comments filled with better information about the sales of certain vehicles.
At least tt's the Ranger that has had a huge jump in sales for Ford, and not the F-350. Also, More and more folks are grabbing the Civic, Matrix, Fit, and even hybrids.
The program certainly isn't backfiring. And I for one think it is a great incentive program. If it helps at all, then it is a success.
As for the person who suggested a gas tax: we're already taxed quite heavily. If you check out this chart (http://www.gasbuddy.com/gb_retail_price_chart.aspx) you'll see that we already pay, on average, $1 more per gallon than the US. :(
Aaron 10:51AM (8/21/2007)
I'll need to look at this at home where I'm not banned from the robert farago wrap around..
either way.. I called this the minute the government launched it (in fact I've mentioned it in the comments section a couple times lol). It was a half assed pansy move.
This being the case I doubt those idiots drilled into the canadian car sales figures. Small cars are and always have sold well here - which I'm sure they fail to mention or note..
these are our top 20 vehicles through july, some trucks, a load of small cars, the impala, and minvans for fleet.
F series
Civic
Corolla/Matrix
Caravan/Grand Caravan
Mazda3 (I)
Ram pickup
Sierra
Silverado
Yaris (I)
Cobalt
Escape
Camry
Pursuit (G5)
Focus
Ranger
Versa
Caliber
Montana SV6
Uplander
Impala
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John B 11:06AM (8/21/2007)
"but slaps a $4,000 excise tax on fuel-heavy SUVs and sports cars."
That must be a real bitch of an SUV or sports car since the $4,000 tax applies only on vehicles consuming 16 litres or more per 100 km (combined highway/city). This equates to less then 18 mpg (imp.) or about 14 mpg (U.S. gal.).
Autos getting hit with the $3,000 - $4,000 tax include Aston Martin, Bentley, BMW (M5, M6), Ferrari, Lamborghini, Maybach. You get the picture - I doubt these buyers will buy a Ram pickup to avoid the tax. Most of the large SUV's only pay a maximum of $2,000 and the smaller SUV's like the Escape pay no tax at all.
Gee, do you think there may be another reason why pick-ups are increasing in sales - like for example a booming construction industry (especially Alberta).
BTW - sports cars? All Porsche models pay ZERO tax. Another example of mainstream media at its finest.
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aaron 11:50AM (8/21/2007)
Good points for sure.
I have no doubt that some of the pickup sales have would be expedition buyers for example going for a f150 quad cab though for example. These typically would be IMO people who haul trailers or camp, people who actually use the vehicles as intended.
either way the article is an obvious dryfire:
again from canada car sales to end of july..
Caliber sales +20%
Mini sales up 10%
Compass is the best selling jeep in canada
Patriot is selling very well
Civic sals are up
Fit sales are through the roof
Mazda 3 sales up
Lancer sales up 60%
Versa sales up 1700%
Imreza sales up
Suzuki Aerio SX4 sales up over 100%
Yaris sales up
Pruis sales up
Record sales of Escape Hybrids
The AUTO MARKET here is up 5% as a whole..
I'm not sure where the ranger numbers come from. according to the auto news data centre ranger sales YTD for canada are up 42% and Mazda B series sales are up over 90%..
Thetruth about making an answer and working the story back to try to fit it.
alegro 11:44AM (8/21/2007)
Ranger sales are taking off because 1. It's the only compact pickup left and B. they're a killer deal. You can buy a full load FX4 with leather for only $24,000. I paid that kind of money for a Tacoma PreRunner in 2003.
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Aaron 11:52AM (8/21/2007)
lol re the great deals on rangers, you got that right. I see them on my way home every day..
But why confuse a truthaboutcars rant with any sort of fact lol..
why not the LS2/LS7? 11:49AM (8/21/2007)
Someone is employing their jump to conclusion mat quite well.
Even if true, and even if this is a result of the regulations, how is this a bad thing? It got people to not buy huge SUVs and buy slightly less huge and slightly more fuel efficient pickup trucks.
The only way this would appear to be a failure is if this cause people who would otherwise have bought fuel-efficient sedans to buy these pickup trucks. And there's no evidence of that, is there?
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Aaron 11:50AM (8/21/2007)
Jump to conclusions mat. Truer words have never been spoken. Normal state of affairs over there though... lol..
Francis 1:04PM (8/21/2007)
This article looks like it's omitting facts for sensationalism. If you're a buyer who needs something to pull your trailer around, of course you're going to buy either an SUV or a truck. A tax is not going to change that. So of course truck sales will go up as a result of this.
What the article doesn't mention is how many people who wanted something for hauling the family around got a minivan instead. Or how much SUV sales are down.
As an aside, I think Canadians generally don't have the same inclination as Americans for buying SUVs where a minivan or hatchback would do just as well.
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Barney 4:53PM (8/21/2007)
If I buy a new truck for commercial usage, I get credited the GST on my GST account. I do have to register it under my business number and keep track of my milage etc.. A person buying a truck for personal use will not get those benefits.
GST = Goods and services tax.
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