DURHAM -- Auto analyst Dennis DesRosiers says an interesting trend is emerging six months after the start of the Federal Eco-Auto rebate program.
“The light truck side of the market in Canada had been losing share over the last few years. Since the Feebate, it has been gaining share,” Mr. DesRosiers observed. “Consumers are buying a lot of pickup trucks which are exempt, instead of paying the penalty on large SUVs.”
The so-called ‘feebate’ pays a rebate to consumers of fuel-efficient cars and puts a levy on larger cars, such as Sports Utility Vehicles.
Sales of light trucks -- which includes small pickups and large sport utility vehicles -- have increased by 8.3 per cent in the first seven months of 2007 over the same period a year earlier. More telling perhaps is how that number is divided: an 18 per cent increase in small pickup sales and a 18.2 per cent decrease in large SUVs.
The Oshawa-built Chevrolet Silverado saw an increase of 15.7 per cent, while sales of its sister model, the GMC Sierra, decreased by 0.4 per cent.
Since pickup trucks provide all the utility of a large SUV but are not subject to the federal government levy, Mr. DesRosiers believes consumers are just choosing one over the other to save money.
“Leave a loophole and consumers and dealers will exploit it,” he said.
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