Automotive News Canada - February 2017 - 8

OPINION

02.17

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Dealers, customers win
if Bill 3 is passed in Ontario
How will an automaker such as Ford, which is so reliant on
truck sales, make the eventual switch to electrics? Where is its
version of the Chevrolet Bolt, pictured? ( P H O T O : C H E V R O L E T )

Records sales mask
serious market issues
JEFF MELNYCHUK

EDITOR-IN-CHIEF

THE CANADIAN INTERNATIONAL AUTOSHOW (CIAS), FEB. 17-26,
can provide a bit of a reality check on industry health.
CIAS General Manager Jason Campbell says there's 360,000
square feet of floor space for the show (about 33,000 square
metres) and that he could sell 500,000 if he had it. There are
dozens of vehicle debuts this year and zero manufacturer
no-shows. That indicates healthy marketing
budgets, which implies that companies are
flush with cash and new product. That's
positive news.
But what about 2016's record sales
numbers? They're significant, but they don't
necessarily equate to healthy bottom lines
nor do they shine light on the obstacles of
the next 12 months and beyond. It's just
one number, like judging a vehicle solely on
its price or its zero-to-100-km/h time. In
some cases, being obsessed with pushing metal to show good
sales numbers actually creates problems.
In Canada, leasing is regaining popularity, which of course
helps move more vehicles on the front end, but on the back end,
a tidal wave of lease returns are predicted to flood the market.
That could collapse residual values, driving up the cost of leasing,
which will affect sales. Is anyone seriously looking at the big picture, here?
Well, that's a great question to ask Ford, and really the Detroit
Three automakers as a whole, when it comes to putting all their
eggs in one basket: trucks. Canadians are, for whatever reason,
bonkers for trucks. As if to prove the point that sales volume
doesn't really matter to industry health, based on dollars per sale,
which would Ford rather sell, 100,000 F-150 pickups or 100,000
Focuses? It's easy math and shows why the company appears to
be just as hooked on trucks as its buyers. Ford sells more F-150s
in Canada than every other vehicle it makes, combined, and the
scale continues to slide.
It's all rosy for now, but Ford needs to address tough questions
about how it intends to replace a large chunk of truck sales - its
cash cow - with hybrids and electrics. Where's its version of the
Chevy Bolt? The irony is that auto shows such as CIAS are flush
with green technology that doesn't even remotely reflect the current buying reality or Ford's business model in Canada.
For now, let's enjoy CIAS and its debut vehicles, but with an
eye to a future that's going to deal the ultimate reality check for
the industry. - ANC

The industry faces
a tidal wave of
lease turns and
needs a plan to
eventually morph
away from pickups

EST. 1925.

PUBLISHED WEEKLY BY CRAIN COMMUNICATIONS, INC.
KEITH E. CRAIN, EDITOR-IN-CHIEF
K.C. CRAIN, GROUP PUBLISHER
JASON STEIN, PUBLISHER
DAVE VERSICAL, DIRECTOR OF EDITORIAL OPERATIONS, AUTOMOTIVE NEWS GROUP

PUBLISHED MONTHLY BY CRAIN COMMUNICATIONS, INC.

NEWS DEPARTMENT
JEFF MELNYCHUK, EDITOR-IN-CHIEF, 506.854.5024, JMelnychuk@autonews.com
JOE KNYCHA, NEWS EDITOR, 204.648.5733, JKnycha@autonews.com

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877.812.1257
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Karen Rentschler, 313.446.6031
Email: Krentschler@crain.com

SOMETIMES, A PIECE OF
proposed government legislation is a no-brainer. Not often,
but it happens from time to
time.
That's the case with Ontario
Leeds-Grenville Conservative
MPP Steve Clark's private
member's bill, the Cutting Red
Tape for Motor Vehicle Dealers
Act, formally known as Bill 3.
It has largely flown under
the radar, but if passed would
save auto dealers time and
money by allowing them to,
well, cut red tape.
Under it, dealers could do
any of the following at the dealership by electronic means:
* Apply for a permit, number plates or a validation for a
vehicle.
* Apply for a new permit for
a vehicle.
* Apply for a used-vehicle
information package.
It would also align Ontario
with Quebec and Prince Edward

DIGITAL AND
MOBILE EDITOR
AUTOMOTIVE
NEWS CANADA

GREG
LAYSON

COMMENT
Island, the only two provinces
that allow licensing of vehicles
by dealers in-house.
No more sending staff to the
nearest Service Ontario outlet
to license a maximum of vehicles two at a time, as is the
case in Belleville, Ont., for
example. And no need to have
public servants make "house
calls" to deliver paperwork
twice a day, like they do in
Peterborough.
In-house licensing is also a
plus for customers. No more
waiting for the final call that
their car is ready. New-car buy-

ers would be able to simply
drive off the lot rather than
leaving and returning an additional time.
The bill hasn't come up for
debate in the Ontario legislature and Clark hopes the governing provincial Liberals eventually make it part of the
upcoming budget.
The Trillium Automobile
Dealers Association, which represents about 1,000 dealerships in Ontario, will launch a
website to educate the public
about the bill and to lobby the
government to get it passed.
It's asking customers who have
had to come and go from the
dealership, or wait in line at
Service Ontario branches before
they take ownership of their
new rides, to email their MPP
in support of the bill.
But this isn't something that
makes sense in only three
provinces, it makes sense in
every province. - ANC

CIAS drives sales because
it puts cars in front of people
THE EXPERIENCE OF SHOPPING
for a new car has changed dramatically over the past decade,
and even over the past five
years.
Just as advances in technology have transformed the vehicles we drive, so too have they
revamped the way we shop for a
new set of wheels.
Going are the days of driving
to numerous dealerships and
car lots to see who would offer
you the best deal. The web and
its endless selection of car-purchasing options have armed
consumers with vast digital
resources to help make up their
minds. The power to shop far
and wide, compare features on
dozens of vehicles and crunch
numbers is literally at their fingertips via their smartphones.
But as much as the marketplace has evolved, one important
factor remains: Before shoppers
are ready to sign on the dotted
line for what will likely be one of
the biggest purchases of their
lives, most people want to actually get behind the wheel of the
vehicle they're considering and
get a sense of how it really feels.

BROAD APPEAL
The Metro Toronto
Convention Centre is transformed into a car hunter's paradise for 10 days every February,
sporting the largest combined
vehicle showroom in the country. More than 30 mainstream
car brands are represented, as
well as every premium and exotic brand for sale in the country.
In fact, no other major auto

The Canadian International AutoShow puts the entire
selection of the country's new cars under one roof,
in a zero-sales-pressure environment.

PRESIDENT,
CANADIAN
INTERNATIONAL
AUTOSHOW

DOUG SULLIVAN

GUEST OPINION
show globally has such a
diverse and wide range of products available in their respective
market as what's showcased in
Toronto.
Despite incredible growth in
online shopping, the AutoShow
has continued to increase consumer attendance. Last year's
10-day show welcomed more
than 320,000 visitors - the
highest combined attendance in
its history.
With more than 1,000 cars
and trucks on display, and
numerous makes available to
test drive from the AutoShow
itself, there's no better venue to
see the whole of what the mar-

ket has on offer in just a matter
of hours.

PRESSURE'S OFF
Because manufacturers staff
their booths with brand specialists who aren't actively trying to
generate on-the-spot sales,
consumers feel less pressure
and more at ease. Many prospective buyers use the show as
an opportunity to get answers
from the experts and then continue their research over the
winter before heading out to a
dealership in the spring to buy a
new vehicle.
With more than 80 per cent
of our show goers expecting to
purchase a new car in the next
two years, and more than 40
per cent of the Canadian car
market driven by sales within
the province of Ontario, the
Canadian International
AutoShow will continue to enjoy
a strong place within the marketing mix of our dealers and
manufacturers for years to
come. - ANC

Table of Contents for the Digital Edition of Automotive News Canada - February 2017