New car sales continue to decline across the country

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New car sales continue to decline in the country

Vehicle sales nines were down in the second quarter of 2022. (Archives)

Due to a lack of available vehicles, new car sales in Canada fell 11.2% in the second quarter of 2022 compared to the same period last year, according to figures from the firm DesRosiers Automotive Consultants.

Inventories are low across Canada, across North America and around the world, says Greg Layson, Digital Editor of Automotive News Canada. He attributes this lack of vehicles to issues of supplying microchips, essential parts for manufacturing automobiles.

Microchips operate many systems in a car, from navigation to window controls. Since the start of the pandemic, a shortage of these electronic chips has put pressure on car manufacturers, which have since seen their sales decline in Canada.

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This decline in the number of new vehicles sold continued in the second quarter of the year. Between April and June 2022, 425,283 cars were sold, according to data from DesRosiers Automotive Consultants. This represents a decrease of more than 50,000 vehicles compared to the same period last year.

Nevertheless, some manufacturers are doing well. Stellantis, a group that operates around 15 automotive brands including Chrysler, Dodge and Jeep, saw vehicle sales grow 16.6% over the second quarter of last year.

Stellantis produces the Chrysler Pacifica minivan in Windsor, Ontario. Dave Cassidy, president of Unifor Local 444, which represents workers at the plant, says sales are good, but there's a shortage of parts to produce the cars.

The whole supply chain has been affected, and that's our biggest problem right now, he explains.

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Stellantis has advised its employees that supply issues are expected to continue at least until next year, Cassidy said. This is also the information Mr. Layson receives from Automotive News Canada. And until the situation is resolved, it is consumers who must wait when buying a vehicle.

“Dealers in Ontario are putting customers on a [preliminary] waiting list to be able to place a vehicle order.

—Greg Layson, Automotive News Canada Digital Editor

Benoit Charette, journalist and automotive columnist, argues that consumers have to wait six months for popular models and up to two years for rarer models. Dealers have become accustomed to not taking orders beyond two years since the model may change [in the meantime], he adds.

Even though dealers automobiles sold fewer vehicles, they made more money in the last two years because there are no rebate programs, explains Mr. Charette. He believes dealerships will no longer stock hundreds of cars they need to finance upfront.

Manufacturers are also turning to just-in-time, according to the automotive columnist. He argues that these can be more profitable by only producing sold vehicles, rather than estimating demand in advance. It is a revolution in the industry, according to him. We've been selling cars the same way for 100 years and now we're learning a new way, he says.

Consumers are forced to adjust their expectations accordingly. You can no longer get up one morning and hope to have a new car the same day, explains Mr. Charette.

If this new model gives headaches to some, Mr. Layson sees it as a natural transition that many industries are experiencing. We are used to ordering products online and waiting to receive them, he explains.

He even sees the day when consumers will do business directly with manufacturers. Dealerships could be eliminated [from the chain], as Tesla does, he states.

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