Canada's January auto sales second best on record

By John McCrank

TORONTO, Feb 1 (Reuters) - Canadian auto sales recorded their second-best January ever this year, industry figures showed on Friday, as automakers continued to cut suggested retail prices in response to the strong Canadian dollar.

A one-percent cut to the goods and services tax that came into effect in January, along with a number of new car models hitting the market, may also have helped sales, said auto analyst Dennis DesRosiers.

Overall, sales were 102,831 units, up 12.8 percent from January 2007, when sales were 91,180 units. Only sales in January 2002 were stronger, DesRosiers said.

"We don't think these levels will continue throughout the year and have forecast the market to be down a few points in 2008, but we must admit that in January, consumers defied the pundits like ourselves," he said in a note.

"The lesson here is don't believe all the negative news in the business media each and every day."

General Motors Canada (GM.N: Quote, Profile, Research), the country's biggest automaker, recorded January sales of 26,509 units, up 18.1 percent year over year, while Ford Motor Co (F.N: Quote, Profile, Research) of Canada sales climbed to 12,708 units, an increase of 9.7 percent, DesRosiers said.

Chrysler Canada posted sales of 16,952 units, up 3 percent year over year.

Honda Canada Inc (7267.T: Quote, Profile, Research) reported record January sales of 12,022 units, a 69 percent increase over last year, and up 31 percent over its previous January sales record of 9,211 units in 2002.