Thinking of buying a vehicle? You might want to park that thought for a while.
A shortage of new and used vehicles for sale has hit many dealers in Southwestern Ontario, leaving lots typically brimming with new models this time of year with fewer options for customers.
The culprit? An ongoing global shortage of semiconductors, tiny computer microchips needed for new vehicles to operate.
"We only have nine new vehicles on the lot right now," said Joshua Heuvelmans, pre-owned vehicle sales manager at Heuvelmans Chevrolet Buick GMC Cadillac Limited in Chatham, southwest of London.
"We don't actually have anything in the showroom because it's all on the lot. In a normal year, we'd be running, at this time, 150 vehicles."
The COVID-19 crisis has also curtailed auto production lines for weeks at a time, driving up demand and leaving customers with longer waiting times and less selection.
Demand for new vehicles is so high that his customers now buy cars from the pre-order list without seeing them in person, Heuvelmans said.
"Before the pandemic, unless you're getting something very customized . . . chances are we would have something on the lot that would meet the customer's needs," Heuvelmans said. "But now, it's no longer about having something on the lot that'll meet their needs. It's just having something on the lot, period.
"Depending on what you're looking for, wait times can be huge," he added, noting interest is soaring for pickup trucks and mid-size SUVs, namely the Cadillac XT6.
It's a similar story over at Huron Motor Products in Exeter. Before the pandemic, it had around 400 new and used vehicles on its lot, said Bill Vandeworp, the dealer's general manager. Now, that number is below 60.
"(Customers) are disappointed," Vandeworp said. "But they're also, unfortunately, getting used to it because it's been going on for a little while. In the beginning, people would come in and say, you know, 'Where are all of your trucks? Where are your vehicles? I want to buy a vehicle.' The unfortunate part is customers are getting used to the lack of supply right now."
The situation doesn't surprise Warren Barnard, executive director of the Used Car Dealers Association of Ontario (UCDA), an umbrella organization representing more than 4,000 vehicle dealers in the province.
He said supply for new and used vehicles had been dwindling for a few years, but the pandemic has exacerbated the situation — both nationally and across Ontario.
"With certain models of vehicles, in particular, SUVs and pickup trucks, it's very difficult to get them new these days unless you're willing to go on a three-, four- or five-month waiting list," Barnard said.
"A lot of folks that normally have not considered the purchase of a used vehicle have looked at used vehicles as an alternative to a new one that they can get without having to wait so long."
Barnard believes the low inventory for new and used vehicles boils down to several factors: the shortage of semiconductors from car manufacturers, pent-up demand from many customers such as first-time buyers, and a favourable exchange rate causing U.S. dealers to outbid Canadian dealers in auctions for used cars.
The combination of low supply, high demand and soaring prices has left many in the industry asking when the market will return to normal.
It's a tricky question to answer, said Barnard, adding, "I don't really see any light at the end of the tunnel," until at least the end of the year.
"A lot of it depends on where we ended up going with this fourth wave and through the winter," Barnard said. "It's certainly not going to end overnight . . . Consumers will have to be patient, wait on what they'd be looking for, or suddenly be prepared to pay more than what they think they have to pay."
The Local Journalism Initiative is funded by the Government of Canada
Calvi Leon, Local Journalism Initiative Reporter, London Free Press