The road is long for buyers of new vehicles
Some Canadians are forced to wait months without news after signing the purchase of a new vehicle .
Some dealerships don't know any more than the consumer how long it will take for a new vehicle to arrive from manufacturer.
Canadians wanting to buy a new car will have to be patient for a long time, while the wait times for obtaining the vehicle could last another year.
Early 2022 , Adam Becker and his wife have decided they are going to have a second child. In this case, this resident of Thornhill, north of Toronto, wanted to get a new, more spacious vehicle, a Cadillac Escalade, to accommodate his growing family.
Knowing that he was going to face a long delivery time, he got ahead of himself.
I would say that I started my research in January, says Mr. Becker. We made a decision and signed an agreement in April.
Adam Becker says he is disappointed with the wait he has to endure to obtaining his new vehicle, the agreement of which was signed last April.
He was then told that his car would arrive in eight to ten months, February 2023 at the latest. The father of the family has not heard from the dealership since signing his contract.
Also coming to terms with the fact that his lease on his current vehicle is ending in May this year, Mr. Becker himself called his dealership two months ago to get an update. updated.
They told me they have no news, but they will keep an eye out, he blurts out, with an incredulous laugh.
“ There is no timeline. I was told that essentially the car will arrive when it arrives.
In addition to the shortage of semiconductors that still prevails, automotive experts explain that the current delays in obtaining a vehicle are due in particular to production delays as well as the value of the Canadian market for automotive manufacturers.
New vehicle production in 2022 and 2021 is about 20% lower than the norm, maintains the director of the Association for the protection of motorists (APA), George Iny.
George Iny believes that the price of a vehicle reaches record highs due to the impact of interest rates on its financing. He advises Canadians to wait before buying and to favor compact vehicles.
He explains that the pandemic has notably caused temporary closures of assembly plants of suppliers of parts, the effects of which are still being felt in the supply chain.
Mr. Iny also mentions that traffic jams at ports meant that components for automobiles were often delayed and even assembled cars had to wait sometimes a few weeks longer to be delivered.
For his part, Jesse Caron of CAA-Quebec believes that automakers see Canada as a smaller market.
< p>“So, some manufacturers decide to concentrate their deliveries, to favor a market like the United States, or China too for example, before Canada. »
— Jesse Caron, automotive analyst for CAA-Quebec
As an example, the expert says that you can easily get a Ford Bronco among our neighbors to the south, while here in Canada, it's still a long time before you get your copy.
Mr. Caron points out that some observers expect a gradual return to normal by 2024, 2025, and that the growing inventory of some dealers could be interpreted as encouraging signs to this effect.
“People looking for a vehicle must be patient,” warns Jesse Caron, expert in automobile for CAA-Quebec.
That said, the analyst for CAA-Quebec notes that some dealers may decide to keep a smaller inventory in the future, noting that they are making as much profit as before with fewer sales, as each vehicle can be sold at full price, without the need for rebates or the offer of very low interest rates.
“So are they going to want to go back to those models or they had to spend a lot of money to have an inventory of vehicles that are available overnight? Maybe not.
— Jesse Caron, automotive analyst for CAA-Quebec
This may be a situation that currently serves the industry well, and less consumers well, he notes. Because obviously the margin for negotiations is much lower than it was before.
These car experts also point out that the price, which is much higher than before, does not discourage consumers from buying a new car.
If we look at the figures that come out, for industry analysts, [the price of certain models] has easily increased by 50 to 60% from the prices of two, three years ago, says Mr. Caron.
Despite everything, he notes, demand continues to be strong, so we don't expect it to decrease.
“People were in a rush to get a vehicle and were willing to pay a lot more.
—George Iny, Director of the Association for the Protection of Motorists
APA Director observes that this post-pandemic demand is the opposite of what was seen during and after the financial crisis of 2008. He explains that the crisis then caused demand to drop by 25% in 2008 and 2009 and that demand had still not reached its usual volume in 2010. /p>
This time it's the other way around. The public, it seemed, wanted to spoil themselves, says Mr. Iny.
According to him, direct federal payments to Canadians during the pandemic, such as the Canada Benefit emergency, seem to have encouraged public confidence.
George Iny adds that travel and travel bans during the pandemic have also meant that Canadians have more means to purchase a vehicle.
Since then, high interest rates have forced many Canadians to tighten their belts, but demand doesn't seem to be slowing down just yet, Ms. Caron.
Thus, the CAA-Quebec expert does not necessarily see a drop in prices coming, while manufacturers, resellers and retailers are getting used to doing slightly more generous profits on each sale.
It's the market that will eventually speak, but for the moment, we are more in a logic of price stability or increase who is running out of steam.