Automotive News Canada - August 2021 - 1

DOES A HALF-OPEN U.S.-CANADA BORDER HELP THE INDUSTRY?/P6
AUGUST 2021 | VOL. 5, NO. 8 | AUTOMOTIVENEWS.CA FOR BREAKING NEWS AND DIGITAL EDITION
Would dealers be willing to become brand agents?
By ROBERT BOSTELAAR
OTTA W A CORRESPONDENT
THE EXPANDING EUROPEAN
retail model of automakers owning the
cars, and dealers receiving a set commission,
is making waves in Canada.
" We have been following this
very closely, " said Tim Reuss, CEO
of the Canadian Automobile Dealers
Association (CADA).
As yet, no automakers have
announced plans to adopt the so-called
With online sales and EVs, being paid a fee per
vehicle sold might already be in the cards. But
there are other key issues, according to CADA
agency model for Canada. But if they do,
they will have plenty of questions from
dealers, said Reuss. For example:
* How would automakers address the
lower valuations for investments dealers
have made in their businesses that
could stem from such a shift?
* How would the industry deal with
" stranded assets " - such as dealer facilities
and real estate - that might no longer
be required under a different business
model in which the automaker
owns the inventory?
* What would it mean for other
aspects of automotive retailing such
as volume targets meant to reward
increased sales?
* And what about
used-vehicle trade-in policies
that are currently
determined by individual
dealers, and dealer
revenue streams from
financing and other secondary
products?
" All of those things
can be worked out. But if
SEE DEALER PAGE 20
Lithia deal paves
the way for others
The U.S. dealership group is expected
to buy Pfaff, and that's 'just the start'
of a retail shake-up in Canada
BY JOHN IRWIN
AUTOMOTIVE NEWS CANADA
THE IMMINENT ARRIVAL OF U.S. DEALERSHIP
giant Lithia Motors Inc. in Canada is likely to open
the door to other retail groups south of the border,
industry experts said.
We really look at Canada as an
extension of the United States.
BRYAN DeBOER
CEO, Lithia Motors Inc.
" If, in fact, Lithia comes here,
that will be just the start, " said
Michael Lewicki, president
of buy-sell company Lewicki
Automotive Consulting in
Toronto. " There will be at least
a handful of other American
consolidators that come north
of the border, whether it be to
Vancouver, Calgary, Toronto [or]
Montreal. "
Lithia, the second-largest
dealership group in the United
States, is expected to purchase
Toronto-based Pfaff Automotive
Lewicki:
" At least a
handful of
other American
consolidators "
will come to
Canada.
FILE PHOTO
Partners, Automotive News
Canada reported in July. It
would be the first notable example
of a U.S. dealership group
expanding into Canada and
would make Lithia the second
publicly traded dealership group
Pfaff Automotive Partners has
16 stores, one of which is Pfaff
Porsche in Vaughn, Ont.
PHOTO: PFAFFAUTO.COM
to operate in the country, joining
AutoCanada Inc.
The deal could have massive
implications for the dealership
buy-sell market. Lithia, with a
market cap of US $11.55 billion
($14.36 billion) - and 262 dealerships
in its portfolio, according
to the company's website - has
SEE LITHIA-PFAFF PAGE 23
FINDING SUCCESS
IN THE NEW
AUTOMOTIVE
MARKETPLACE
Reuss:
CADA is
providing
information
about the
agency
model to
dealers.
FILE PHOTO
Brampton's
crossroads
With no product mandate
to follow the Dodge Charger
and Challenger, there are
several scenarios, including
potential battery production
BY JOHN IRWIN
AUTOMOTIVE NEWS CANADA
STELLANTIS' ASSEMBLY PLANT IN
Brampton, Ont., is reportedly without a product
mandate beyond 2023, setting the stage for possibilities
ranging from closure to a major investment
in an electric transformation.
AutoForecast
Solutions
LLC (AFS), a U.S.-based forecasting
and consulting firm,
told Automotive News Canada in
July that production of the Dodge
Charger and Challenger muscle
cars is expected to move to the
United States, where they will be
built on a new platform that will
accommodate an electric variant.
" Brampton has the LX
[Charger and Challenger]
platform that has been paid
for for years, " AutoForecast
Solutions CEO Joe McCabe said.
" Brampton would either have to
continue on the LX platform for
the next generation or get a sigMcCabe:
To
build cars
past 2023,
Brampton
will need a
new vehicle
or an
extension
of the
current LX
platform.
FILE PHOTO
nificant investment for a new platform " to continue
assembling vehicles beyond 2023.
The Charger and Challenger are thought to
be highly profitable for Stellantis, and demand
continues to be strong. But questions have lingered
about the Brampton plant for years, given
the LX platform's age and the lack of recent
SEE SIGNS PAGE 24
EXCLUSIVE
LEAD SPONSOR:
SEE P. 16
http://www.AUTOMOTIVENEWS.CA http://www.PFAFFAUTO.COM
Automotive News Canada - August 2021

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