Automotive News Canada - April 2021-v2 - 8

* APRIL 2021

The demands of short supplies
Dealers stay nimble
- and pull out all the
stops - to combat
vehicle shortage

By DOUG FIRBY and PERRY LEFKO

monthly budget.
As a result, the dealership has
been able to hold on to its buyers,
Theetge said.
" So far, so good. "

'IT'S GOING TO BE TOUGH'

While his other dealerships face
their own supply challenges, the
GM store has been hit particularly
hard, Theetge said.
THE ONGOING INVENTORY
" Fifty-five per cent
squeeze has put the onus on dealers,
of
our
sales [at the
often working with their automakers,
GM outlet] are lease,
to find ways to hang on to new-vehiand most of those are
cle customers and shore up dwindling
24 months, " he said.
stock on their used-vehicle lots.
" I don't know what's
Erin Mills Mazda in Mississauga,
going to happen. It's
Ont., is trying to replenish its supply
going to be tough. "
of used Mazda3
Two of the
sedans by offermost popular vehiBoquist:
ing customers
cles have been
Dealers
with two years
the Chevrolet
throughout
remaining on
Silverado 1500 and
Canada are
their leases the
GMC Sierra 1500.
bemoaning
opportunity
Pickups are hot sellthe lack of
to break their contracts with little or
ers in his region. In
vehicles.
no penalty as long as the vehicle has
a typical year, the
He's waiting
retained its market value.
GM dealership sells
on a big
General Sales Manager Aman Soos
or leases 600 pickups
back order
said the automaker is helping by proand about an equal
of F-150
viding incentives, such as offering existpickups.
number
of
SUVs
and
ing Mazda3 lessees an opportunity to
cars, Theetge said. He F I L E P H O T O
buy into a newer version of the car for a
began March with
similar payment, downgrade to a lower
just two Sierras on his lot and no
model with a reduced payment or simSilverados, and April was no better.
ply turn in the car without having to
Other automakers hit hard by the
buy or lease another one.
chip shortage include Ford Canada,
" We're always looking for what
Erin Mills Mazda Dealer Principal Ravi Menon, right, pictured with General
Honda and its sibling Acura brand,
opportunities we have and where can
Sales Manager Aman Soos, said his store is prepared to buy out lease
Volkswagen and Toyota. Supply is also
we help out our customers as well, "
customers even if means cutting profit margins. P H O T O : P E R R Y L E F K O
tight at Theetge's Mercedes dealersaid Soos.
ship, but the manufacturer is " workThe used-car market for the Mazda3
WILLING TO CUT PROFITS
Soos said the dealership buys the
ing really strong " to deliver allocations
has been " hot. "
vehicle and pays the financing compaof new vehicles.
Ravi
Menon,
dealer
principal
of
Soos said his dealership normalny that arranged the lease, and it then
Zakary Paget, a spokesman for
Erin Mills Mazda, said the dealership
ly has 40 to 50 used cars, 80 per cent of
becomes the owner and can resell it.
Mercedes-Benz Canada, said the comis prepared to buy out lease customers
which are Mazda3s. But that inventory
In Quebec City,
pany is working
even if means cutting its profit margin.
has been cut in half because of an overBenoit Theetge has
" closely and transpar " We did this so we could get more
all used-vehicle shortage.
employed a multiently " with its dealcars
and
help
our
guests
because
they
The global auto industry, which has
pronged strategy to
er network to react to
are going to come back to us anyway
yet to recover from production shutmanage an inventory
any inventory chalonce everything settles down, " he said.
downs at the start of the pandemic last
challenge he could not
lenges.
" We
put
less
profit
in
our
pockets
to
year, is grappling with a worldwide scarhave imagined when
" While there has
help Mazda guests as much as possible.
city of microchips, used in numerous
his dealership group
been
some impact
I
told
[staff]
particularly
when
COVID
vehicle components and systems. That
The Chevrolet Silverado is a
acquired a General
to vehicle deliveries
started, even, it means breaking even,
shortage has had a ripple effect on the
big seller at Benoit Theetge's
Motors store in
of specific models, "
get this car into the lot. We bought a
availability of used vehicles amid rising
GM store in Quebec City.
December 2019.
Paget said, " we have
lot
of
cars
that
way. "
consumer demand.
But he began March with
Then, hot-sellworked closely with
only two Sierra pickups and
ing vehicles ensured
our dealers to minizero Silverados on his lot
inventory was turnmize the impact on
PHOTO: GENERAL MOTORS
ing over quickly. But
customers. "
today, as a microchip
BIGGEST-EVER
BACK
ORDER
shortage chokes the flow of new vehiTrevor
Boquist,
chairman
of
cles, Theetge Chevrolet-Buick-GMCthe Canadian Automobile Dealers
Cadillac - like many dealerships
Association, said he is hearing from
across Canada - is having trouble
dealers across Canada about the supsecuring new vehicles, including ones
ply crunch. Boquist's Ford dealerships
to replace vehicles coming off two-year
in Saskatchewan, part of his Driving
leases.
Change Automotive Group, have a
" That is a big nightmare;
back order of 97 F-150 pickups.
it's getting really crazy, " said
" Our sold-order bank is the biggest
Theetge, who co-owns the four-dealit has ever been, " he said. " We norership Groupe Theetge with his
mally would have 10 to 15 [on back
brother Donald. The company also
order] at any time, so this is signifiowns Mercedes-Benz, Honda and
cant. "
Acura stores in the Quebec City area.
Automakers are helping by locking
In cases where customers are willin incentive offers to customers willing, Theetge's GM dealership is helping to wait for new vehicles. For examing clients arrange a lease extension
ple, most F-150 models qualify for
with the automaker. In cases where a
rebates of up to $4,000 plus purchase
lease has ended, he is providing cusfinancing of 2.99 per cent per year. The
tomers with the dealership's courincentives, combined with loyalty to
tesy car until a replacement vehicle
a particular brand, are often enough
arrives. Although he is prepared to
to persuade customers to wait, Boquist
rent cars for customers who are waitsaid. In the case of leases, automakers
ing on a new vehicle, he says he hasn't
are usually willing to offer extensions.
had to do that yet.
To avoid turning away customers because he lacks vehicles, Benoit Theetge,
The biggest challenge is " the perTheetge is also offering customleft, is offering to extend leases or, if the lease has ended, provides used
son who has to have [a vehicle] today, "
ers vehicle models other than their
or rental cars until a replacement vehicle is available. His brother, Donald,
he said. - ANC
first choice while staying within their
co-owns Theetge Chevrolet-Buick-GMC-Cadillac. S U P P L I E D P H O T O
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