A sign stands outside Oshawa's General Motors car assembly plant in Oshawa, Canada.Michelle Siu/The Globe and Mail
General Motors Co. is scaling back production of passenger cars at its Oshawa, Ont., plant in the first quarter of 2018 as North American drivers abandon their cars in favour of crossover utility vehicles.
Output of the Chevrolet Impala and Cadillac XTS in Oshawa – the two car-model lines still being produced by the plant – will cease for the first three weeks of January. When production resumes, it will be on one shift instead of two through the end of March, with shifts of workers rotating weeks off in order to avoid layoffs.
The cutback is part of the auto maker's strategy to align production with market demand, General Motors of Canada Co. said in an internal company newsletter.
The move comes amid surging demand for crossovers, which have replaced sedans and minivans as the vehicles of choice for millennials and families who favour utility over stodginess.
The trend is evident in overall sales figures for both the Canadian and U.S. markets, as well as GM's own sales figures for the two car models and its crossovers.
Americans bought 10 per cent fewer passenger cars in the first 10 months of the year than they did a year earlier. They rolled 8 per cent more crossovers into their driveways.
Passenger car sales slid 7 per cent in Canada in the same period. Deliveries of subcompact crossovers soared 33 per cent, while compact luxury crossovers and sport utilities jumped 16 per cent.
Impala sales slumped 27 per cent through October in the U.S. market, which is where the bulk of the cars made in Oshawa are sold. Canadian sales actually rose 26 per cent, but they make up just 4.5 per cent of Impala sales in the two countries.
Deliveries of the full-sized Acadia crossover and the compact Equinox jumped by double digits in both markets.
George Badanai, who owns Badanai Motors Ltd., a GM dealership in Thunder Bay, said he ordered no Impalas in 2016 and two this year. It took him eight months to sell the two cars.
"It's a beautiful car; it's the best Impala we've ever had," Mr. Badanai said. "Yeah, we've got a great sedan, but if no one's buying that segment, it's hard to stock it."
For all auto makers in Thunder Bay – which, given its location in Northern Ontario, is more a truck and utility-vehicle market than a car market – sales of mid-sized cars dipped to 143 in the first nine months of 2017 from 186 a year earlier, he noted.
His single bestselling model after pickup trucks is the Equinox. His sales of that model, plus other crossovers and utilities, now outstrip pickups.
"I've been around 36 years … for the first time in my career, the pickup truck is being outsold by SUVs."
Cadillac passenger cars such as the ATS, CTS and others sit for longer periods of time on the lot than the XT5 crossover and Escalade SUV, whose sales are increasing, said Michael Croxon, president of New Roads Automotive Group of Newmarket, Ont., which includes a GM store in its stable.
The shift in consumer tastes is appearing across all brands, Mr. Croxon said. "Whether it be our Mazda customers choosing CX3 or CX5 over Mazda [cars], our Subaru customers choosing Crosstrek over Impreza, or our GM customers choosing the various SUV options versus Cruze, Malibu or Impala, the trend is very apparent," he said.
There are about 750 workers on each of the two shifts on what GM calls the flex line in Oshawa. The plant is also gearing up to start cranking out pickup trucks in what GM president Mary Barra referred to last month as the "Oshawa shuttle."
Frames for pickup trucks will be shipped to the Oshawa factory, where they will be painted and workers will perform final assembly. Output of the full-sized pickups is expected to begin in January. Ms. Barra said the plant is expected to turn out about 70,000 pickups in 2018.
Officials of Unifor, which represents hourly paid workers in the plant, have said they expect production of trucks to start on one shift but increase to two shifts in late spring next year.
GM Canada spokeswoman Jennifer Wright said work continues at the plant to support new model and product changes.