In the past 17 months, this has been a crazy journey for car dealers. After the pandemic, demand is accelerating, but supply is empty.
At Westlock Motors, there is only one truck in the showroom.
Westlock Motors’ sales manager Colby Ducharme said: “At present, based on our inventory levels, we are parking the parking lot as much as possible to make it look full and hope people know that we are still open.”
Dealers usually own up to 100 new cars. On Wednesday, there were only seven.
According to the Alberta Automobile Dealers Association, this is a widespread problem.
“From a supply base perspective, this is indeed driven by the microchip problem,” said President Gerald Wood.
“This is a global problem. It affects every manufacturer.”
Several of the world’s largest automakers have been lacking semiconductors. Semiconductors are an important part of electronic equipment and are also vital to the infotainment module, engine and fuel management system of new cars.
The Alberta Automobile Dealers Association stated that the production of domestic brands has been hit particularly hard: Ford, General Motors and Stillantus, which produce brands such as Chrysler and Jeep.
“Fortunately, General Motors has taken a stance, letting some small-volume production lines idle and slowing down these factories to try to produce more trucks and SUVs for us,” Ducharm said.
But it still takes time, which means delays for customers.
“On average, we have seen waiting times of three to four months,” Ducham said. “Today, you may extend it. We sometimes see customers have been waiting for almost a year.”
The second-hand car market is also very hot.
Brian Murphy, managing director of Kelley Blue Book and Data Solutions, said: “We see that the price of a used car is actually almost the same as a new car, or in some cases a little bit higher than a new car.
Used car prices He said that in Canada, this is the highest in history, at least in terms of data.
Caeron John, owner of Just Auto, explained: “The franchised dealers didn’t get any new cars, so they kept second-hand inventory, and we usually get supplies from there.”
Edmonton’s Just Auto usually has 30 cars for sale. Last year, it could only carry half of it.
“We have been on Facebook Marketplace or Kijiji, and we are looking for private transactions,” John said.
The same pressure also hit the rental shops.
According to the Associated Canadian Car Rental Operators (Associated Canadian Car Rental Operators), as demand plummets during the pandemic, car rental companies across Canada sold an average of 30% to 40% of their fleet. But now that domestic travel has picked up, the supply of new cars is still tight, and car rental companies are scrambling to meet consumer demand.
Murphy said that car rental companies will continue to use existing vehicles and sometimes buy second-hand cars.
John noticed that the shortage of supply also changed the behavior of customers.
“When they see something they like, they actually try to deposit a deposit and snatch it away immediately.
“Before that, the customer would say:’I like this car, but I want to see two other dealers.'”
Murphy said that although the supply shortage is a headache for buyers, it is an opportunity for sellers who have extra cars but they are of little use.
You can use sites like Kelley Blue Book or Canadian Black Book to consult prices and make sure you list the prices current buyers are willing to pay.
“Of course, if you have a vehicle that you want to liquidate, this may be the best time,” Wood said.
— File from Erica Alini, Global News
© 2021 Global News, a division of Corus Entertainment Inc.
