Auto makers in Canada are mired in a seven-month slump, with a tumble of 11 per cent in February sales amid rising operating costs, economic fears and signs of buyer fatigue.

Sales slid to 92,461 last month from 103,375 in February, 2003, the worst February performance since 2001.

A combination of factors has caused the slide, said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc., who pointed to consumer uncertainty about the state of the economy, overbuying for several months previous to the slump because of high incentives and continued increases in such operating costs as insurance.

Among the major companies, sales rose for General Motors of Canada Ltd., Mazda Canada Inc. and Toyota Canada Inc.

Other major players took a pounding, including DaimlerChrysler Canada Inc. with a 20-per-cent slide, Ford Motor Co. of Canada Ltd. -- down 15 per cent -- and Honda Canada Inc., whose sales tumbled 25 per cent.

GM and Toyota held their own with increases of a fraction and 1 per cent respectively, while Mazda led the parade with an 18-per-cent jump.

"Mazda has the hottest product in the marketplace," Mr. DesRosiers said.

Mazda's 18-per-cent jump was sparked by sales of its Mazda3 compact car, which is new in the 2004 model year. In the first two months of this year, it was the best-selling passenger car in Canada, pushing aside the Civic from Honda.

Mazda has sold 5,386 Mazda3 models, compared with Honda's 5,095 Civic sales.

It has sold more Mazda3s so far this year than all cars combined for the Chrysler division of DaimlerChrysler Canada.

GM's strategy for boosting sales in the entry-level segments of the passenger car market -- subcompacts and compacts -- appears to be working, Mr. DesRosiers said.

GM said sales of its entry-level Chevrolet Aveo, Optra and Epica cars totalled 2,438 units last month, a 51-per-cent jump from sales of its compact cars in 2003.

Mr. DesRosiers is predicting a drop in overall vehicle sales for the full year -- to 1.565 million from 1.593 million in 2003.

But Bank of Nova Scotia economist Carlos Gomes disagrees with that assessment. He is sticking with his forecast that sales will reach 1.625 million vehicles this year.

He noted yesterday that much of the decline in February sales was accounted for by the slides at Chrysler and Ford, which will introduce major new or redesigned vehicles later in the year.

"I still think that the underlying fundamentals are still supportive of vehicle sales," Mr. Gomes said. Employment has picked up, he said, and the Bank of Canada's decision yesterday to cut interest rates shows that it clearly wants to see an increase in domestic demand.