New cars hard to find as Sask. dealerships struggle to get inventory
Saskatchewan car dealerships that once showcased hundreds of new and used vehicles have seen their supply dwindle so low they now have only a dozen or so new cars on the lot.
“Because there’s no new cars, the value of used cars has gone up exponentially, like unbelievably,” said Patrick Crowthers, new car sales manager at Wheaton Chevrolet in Regina.
“I also tell people when you’re trading in your car the incentives aren’t on the new cars any more. The incentives are on the used cars.”
Crowthers said that, prior to the pandemic hitting Saskatchewan in March 2020, his dealership would typically have several hundred new vehicles for sale on its lot.
On Tuesday when he did a quick tally, he counted 14.
“It used to be GM would offer … anywhere between $5,000 to $10,000 off. Now they’re not offering anything off from the manufacturer,” he said.
“You kind of have to pay what the sticker is.”
Crowthers said Wheaton has managed to keep its used car inventory fairly stocked, but the price on pre-owned vehicles has gone through the roof because it is difficult to buy new, he said.
“We’ve had people trading in vehicles that they bought a year ago for what they paid a year ago,” he said.
“That was the first time I’ve ever seen a car appreciate. Cars are a depreciating asset.”
His dealership buying more used vehicles outright, as opposed to as trade-ins, than normal.
He said dealerships are also scouring Facebook and Kijijii to boost used inventory on the lots, keeping cash flow up and people employed.
Semiconductor shortage blamed
Automotive journalist Dale Johnson said the new car market is still suffering from the semiconductor shortages created when the pandemic first hit in 2020.
Manufacturing on semiconductors was halted as companies sent workers home for their health and safety. Demand for new vehicles was also poor in the early stages of the pandemic, leading manufacturers to cancel their orders on the components, Johnson said.
At the same time, demand for the semiconductors, which are used in computers and other electronics, increased.
When the car manufacturers started production back up, they were placed to the back of the line for semiconductors, Johnson said.
The car industry uses semiconductors for electronic components like heated seats, heated steering wheels and navigation systems.
A fire at one of the manufacturing plants compounded the shortage, Johnson said.
You can buy your vehicle, but it won’t have all of the bells and whistles it would have before. – Dale Johnson, automotive journalist
“Automakers have also announced that you can buy your vehicle, but it won’t have all of the bells and whistles it would have before,” Johnson said.
“And either there’s a discount or else you just wait and you’ll get it retrofitted when the parts come in.”
Johnson cited a survey done by Autotrader that found the shortages have driven prices on used vehicles up by about 34 per cent nationwide.
Saskatchewan has seen the price of new vehicles increase by 15 per cent, the highest in the country, Johnson said.
He said the increase in gas prices and interest rates could also impact auto prices.
Back at Wheaton, Crowthers said his sales team tells prospective buyers to put their money down and sign the papers if they are interested.
“Nobody seems to understand how quick these things move. When your salesman tells you put your credit app and deposit on this vehicle because it might not be here tomorrow, they mean it.”
