As supply chain issues continue to cause significant delays for auto manufacturers around the globe, local car dealerships are being forced to adapt to a changing landscape in the post-COVID-19 market.
Last year, computer chip shortages led to wait times of up to four months for new vehicles at Sunrise Toyota.
With new cars in short supply, used cars climbed in value as customers were left looking for alternative ways to secure transportation.
Heading into the new year, the outlook is a little better, local dealers say, but overall similar: certain vehicles will have unknown wait times as supply chain issues persist.
If you drove by Orillia Kia, you likely wouldn’t notice there are any issues in the car market.
The shortfall in new cars has led to the dealership significantly increasing its stock of used cars.
In previous years, the dealership would have 25-30 used vehicles on its lot, but now there are around 50, representing more than 75 per cent of its inventory.
“We've almost one hundred per cent turned our focus to used cars because that's how we're going to keep going through this hard time, and the only way we're going to do that is if we outsource and buy pre-owned cars, because we know people need pre-owned cars,” said Orillia Kia general manager Dustin Stein.
“We sell a lot more pre-owned cars right now than we do new. People want cars that are on the lot now,” he said.
“The fact of the matter is when people need cars they need cars, so we have to cater to those customers." said Stein.
The market has improved slightly over the past year, with some vehicles easier to source than others, Stein said, but he added that most new vehicles arriving at the lot are sold.
“It's definitely improved. We are seeing more cars being produced and and we are getting more cars than we did last year, (but) it's still not where we want it to be. It's still not where we're used to it being,” he said.
“All manufacturers are dealing with those shortages on new cars right now. The manufacturers are currently still trying to bounce back from COVID-19, from the microchip shortage, and the wait times for a lot of the cars are still a long time because they haven't caught up yet," said Stein.
In the interim, he said the dealership has tried to offer fair prices on used cars, which are not priced “to make a ton of money,” and business is plugging along just fine with that adaptation.
“We have to adapt our business model to make sure that we succeed during this time,” Stein said. “We're actually busier than we've ever been. We have lots of customers coming in. We are looking for more staff, actually, to cater to our customers' needs.”
At Sunrise Toyota, the car lot is noticeably more bare on inventory, which paints a clearer picture of the issues affecting the auto manufacturing industry.
Principal dealer Tom Ruff said his dealership is still moving cars, but supply chain issues have led to less of a “touch and feel” marketplace.
“The lay of the land is there's cars flowing. Most of the units that we will supply to customers are pre-sold,” Ruff said. “Wait times could be as short as one day, if they pick the right vehicle in the right combo, or it could be a lot longer. The marketplace right now is a non-touch and feel marketplace.”
Due to technological advancements, the cars of today “aren’t the same cars that our grandparents drove,” said Ruff, which has impacted the “easy flow of product” following COVID-19.
That said, he anticipates things improving this year.
“Over the last year, we haven't had staffing issues. I would say, if things go to our plan, we will be hiring people in the next 12 months, not laying people off," said Ruff.
“It is difficult and frustrating at times out there, (but) we need to stop the doom and gloom and it's time we just move on.”