Automotive News Canada - July 2021 - 9

* JULY 2021
9
Inventory woes have dealers looking for answers
CONTINUED FROM PAGE 1
" Although recent inventory
has not been optimal due
to the semiconductor shortage
affecting global supply, we still
maintain one of the highest
months of supply globally for
Kia subsidiaries, " Bernardo
said. " We are making efforts
to further educate our dealer
body on global allocation to
provide comparative insights
into other markets. "
A study commissioned by
CADA found that 57 per cent
of Canadian dealers surveyed
" don't believe that [they] are
getting their fair share of global
vehicle allocation. " The survey,
released in May, polled
535 dealerships across the
country.
It also found that 91 per
cent of dealers were concerned
about inventory levels in general
during the microchip
shortage.
More than 4.7 million vehicles
have been taken out of
production schedules worldwide
due to the microprocessor
shortage, according to
AutoForecast Solutions. That
has strained inventory levels
around the world as fewer
new vehicles make their way
to dealership lots, all while
demand picks up in North
America as COVID-19 cases
subside and vaccination levels
rise.
A SHORTAGE OF EVIDENCE
Canadian dealers have
voiced concerns that other
countries are being favoured
over Canada, although Reuss
said CADA has found no evidence
of this.
Automotive
News Canada
reached out to
every major
automaker in
the country
except Tesla,
which does not
have a dealer
network,
to ask about
their response
to the survey's
findings as
well as dealers'
concerns
Marsaud:
Nissan
dealers are
getting their
" fair share "
of new
vehicles.
FILE PHOTO
about unfair allocation. Four
automakers - Kia, MercedesBenz,
Nissan and Stellantis -
responded.
In an emailed statement
from Nissan Canada spokesman
Didier Marsaud, the company
is " getting its fair share
of the global allocation " and
that it is " working tirelessly to
secure the maximum quantities
for North America and in
turn for Canada. "
" We meet very regularly
with our dealers and share
the information in a transparent
manner to keep them up
to date, " Marsaud wrote, adding
that Nissan " completely
understands the level of frustration
of dealers. "
" The economy is hot, the
pure retail industry is healthy,
and we want to be in a position
to fulfill that demand. ... Other
than maximizing our production
for Canada in the short
term, our top priority right
now is to ensure we put plans
in place to make up some of
the missed opportunities in
the second half of the year. "
Kia Canada said it " works
closely with its dealer body to
ensure an optimized and fair
monthly supply of inventory. "
Mercedes-Benz Canada said
it provides its dealers " timely
updates on upcoming inventory
levels " and works to ensure
the delivery of an appropriate
supply of new vehicles to meet
demand in Canada.
Meanwhile, a spokesperson
for Stellantis said the company
" continues to work closely
with our suppliers and dealers
to mitigate the manufacturing
impacts caused by the various
supply chain issues facing our
industry. "
SHORTAGE MAKES SENSE
Steve Chipman, CEO of
Birchwood Automotive Group
in Manitoba, said that while
he believes Canadian dealers
are getting shortchanged,
it is logical that some automakers
would prioritize the
United States and Europe over
Canada. Newvehicle
margins
are generally
higher
in the United
States than in
Canada, and
vehicles built
in Europe
are cheaper
to sell there
than in North
America
because they
do not need
to be shipped
across the
Atlantic
Chipman:
Dealers are
not getting
their fair
share of
allocation,
but that
makes
sense.
FILE PHOTO
Ocean, Chipman said.
" They can sell more cars in
the [United States] than they
can in Canada, " he said. " They
have the same problem [there].
They have high demand and
short supply.
" And with European costs,
they'll often stay in Europe
because there's less freight
costs, they can turn the cars
faster, etc. I know that from
dealing with some of the
European manufacturers. "
Chipman said he hopes that
inventory levels will slowly
return to normal over the coming
months. He said his group
- which includes stores that
sell Kia, Nissan and Stellantis
brands - was at about twothirds
of its normal new-vehicle
inventory in late June.
" It's going to be tough for
the next few months, [but]
starting in September and
October [it] could start getting
better, " he said, though he did
not expect a return to " real
normal " until spring 2022.
The supply crunch could
also be alleviated as global
vehicle production starts to
normalize in the second half
of 2021 and into next year, said
CADA's Reuss.
" The situation is improving
somewhat, obviously not
to pre-COVID levels, " he said.
" But there seems to be an
improvement that's starting to
happen now on the production
side. It's going to take some
time, though, until dealers see
some relief on this. " - ANC
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Automotive News Canada - July 2021

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