Automotive News Canada - May 2021 - 1

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MAY 2021 | VOL. 5, NO. 5 | AUTOMOTIVENEWS.CA FOR BREAKING NEWS AND DIGITAL EDITION

For B.C. dealers, it's luxury tax on top of luxury tax

FEDERAL
BUDGET
THE IMPACT ON
THE AUTO SECTOR

P16/17

By DOUG FIRBY
AUTOMOTIVE NEWS CANADA

BRITISH COLUMBIA NEWvehicle dealers are facing another
" layer of taxation " amid Ottawa's
plan for a federal luxury levy
on vehicles costing more than
$100,000.
The measure will strike espe-

A combined 27% on a
$150,000 vehicle adds
$40,500 to the price
cially hard in B.C., where the provincial government in 2018 hiked
the sales tax to 15 per cent for cars
priced at $125,000 to $149,999, and
to 20 per cent for vehicles $150,000
and higher.

INVENTORY SHORTAGE

In for the
long haul
Vehicle production continues to be hit,
and there are few solutions as
executives predict shortfalls into 2022
being affected.
AUTOMOTIVE NEWS CANADA
Ford Motor Co., for example, in late April said it
would be forced to cut 50 per
cent of its planned producINVENTORY ON DEALER
tion for the second quarter
lots will continue to dwindle
over the next several months, of this year, or about 700,000
units.
as the effects
That folof the globlows about
al microchip
200,000 vehishortage
cles being
are likely to
taken out
persist into
of producnext year,
AFFECTED
tion in the
industry
CANADIAN
first quarexecutives
PRODUCTION/P23
ter and will
and analysts
be followed
said.
by another
Michael
200,000 vehicles at the end of
Carmichael, CEO of UpAuto
the year, the company said.
group in Ontario, said managing inventory, particularNOT RESOLVED FOR YEARS?
ly at his Buick-GMC store,
has been a " real grind. It's
Ford CFO John Lawler
very tricky. " Carmichael
said the global shortalso owns Nissan and Subaru age might not be fully
dealerships. " To be coming
resolved until 2022. It's
into May with the inventory
an estimate echoed by
we have on the ground, it's
Mark Liu, chairman of
terrifying. "
Taiwan Semiconductor
The problem: No one
Manufacturing Co., who said
knows where the bottom is.
on the May 2 episode of CBS
The semiconductor crisis
News' " 60 Minutes " that the
has rocked the industry this
supply shortage might only
year, forcing automakers
be alleviated by the end of
to cut production at plants
the year or early 2022.
worldwide, drastically reducOn the same news proing inventory on dealer lots.
gram, Intel Corp. CEO Pat
According to AutoForecast
Gelsinger said it could take
Solutions LLC (AFS), more
several months for the strain
than 2.5 million vehicles
on supply to even begin eashave been removed from
ing. The chipmaker said it is
production schedules worldreworking some of its factowide, with the forecasting
ries to increase production
company projecting as many
as 3.6 million light vehicles
SEE MICROCHIP PAGE 23
By JOHN IRWIN

MICROCHIP
IMPACT

For a $150,000
vehicle, the combined B.C. and
federal taxes
will add 27 per
cent to the price,
according to
Automotive News
Canada calculations based on
federal Finance

Department figures.
Blair Qualey, president of the
New Car Dealers Association of
B.C., said dealers are " just frustrated to see another layer of taxation in what's already a challenging situation. "
Qualey said his members
Qualey

SEE B.C.'s PAGE 16

FILE PHOTO

MOVING TO

MALLS
More traffic and exposure:
For these dealers, the math
to relocate adds up, and
the shopping centres get
a new breed of anchor store
By PERRY LEFKO
TORONTO CORRESPONDENT

DEALERSHIP GROUPS AND SHOPPING
malls, both beset by the explosion in online
retail, are joining forces in a " win-win " bid to
reap the benefits of locating auto retail stores
at major centres.
In April, Ontario's Pfaff Automotive
Partners opened a 53,000-square-foot
(4,900-square-metre) Porsche dealership
within steps of the CF Markville Mall in
Markham, just outside Toronto.
In Alberta, Prestige Auto Group plans to
move its flagship Mayfield Toyota store into
the West Edmonton Mall, one of Canada's
major tourist attractions, by September.
Prestige Auto Group said that once Mayfield
Toyota moves into the West Edmonton Mall
in September, it will be the only full-service
dealership inside a shopping centre in
Canada. I L L U S T R AT I O N : P R E S T I G E A U T O G R O U P

Located within walking distance of
CF Markville Mall near Toronto, Pfaff
Automotive Partners' new Porsche store is
close to about 12 million shoppers a year.
P FA F F A U T O M O T I V E PA R T N E R S

" We're essentially a big marketing arm for
Toyota, " said Daniel Person, vice-president of
specialty leasing and partnerships at West Edmonton Mall,
which draws about 32 million
tourists and shoppers annually. " This gives them the ability to reach customers and sell
them their products. We just
see this as a complete winwin. "
The move will make
Person: Mall
Mayfield Toyota the only
anchors,
full-service dealership inside
such as
a shopping centre in Canada,
department
Prestige Auto said.
stores,
The six-building deal " aren't what
they used to ership, which opened in
be in retail. " 1999, was looking to expand,
SUPPLIED
said Prestige CFO Saleem
PHOTO
Budhwani.
" Organically, we kept on growing, but
this is a better solution because everything is
under one roof, " Budhwani said. We " thought
it was a good fit, so we went for it. It's a better

SEE THE ON-RAMP PAGE 22

Samir
Akhavan

MANAGING PARTNER

416.880.8989 samir@templetonmarsh.com WWW.TEMPLETONMARSH.COM

http://www.AUTOMOTIVENEWS.CA http://WWW.TEMPLETONMARSH.COM

Automotive News Canada - May 2021

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