Automotive News Canada - December 2021 - 26

26
* DECEMBER 2021
2021THE YEAR
IN REVIEW
The year began and ended with the Canadian auto
industry still in the grips of the COVID-19 pandemic.
From plant shutdowns and microchip shortages,
to soaring used-car prices and consumers hoarding
cash, the virus continued to dominate headlines. As
the year went on, however, slivers of optimism began
to poke out from under the doom and gloom.
By KELLY TAYLOR
WINNIPEG CORRESPONDENT
JANUARY
On Page 1, Canadian auto
parts makers say COVID-19
border restrictions are costing
millions of dollars in lost business
as key staff continues to
face challenges meeting with
customers and suppliers in the
United States. ■ ■ ■
Economists
say Canadians are sitting on
cash - money they have been
unable or unwilling to spend
during the pandemic - and
are expecting a flood of newcar
sales in the spring.
■ ■ ■
APRIL
Auto shows across the
country cancel, in some cases
for a second straight year, forcing
automakers, dealers and
other businesses that would
otherwise attend the Toronto,
Montreal and Vancouver auto
shows to find new ways to connect
with consumers.
FEBRUARY
Of the many impacts of COVID19,
a shortage of integrated
circuits - the brains behind
many new-car features - is
forcing automakers to idle
plants and stockpile nearly finished
vehicles that cannot be
sold. There appears to be no
solution as new-vehicle inventory
is stressed. ■ ■ ■
Despite
that, dealers say that while
sales are down, profits are
higher. ■ ■ ■
Unifor, the union
representing workers at the
Detroit Three automakers in
Canada, celebrates as General
Motors announces a $1-billion
investment in its CAMI
assembly plant in Ingersoll,
Ont., to build electric vans
under its new BrightDrop
brand. The plant builds the
Chevrolet Equinox utility
vehicle, but up to now
there have been no future
products assigned to the
plant, casting doubt on its
future.
MARCH
The shortage of new
vehicles means that
desperate customers
instead resort to buyRetailers
describe the state
of industry-wide inventory
as " Mad Max right now, "
invoking the name of the 1979
post-apocalyptic thriller and
suggesting it's a battle for survival
as inventory troubles
continue to thin lots. ■ ■ ■
The
Saskatchewan government
wants to increase the registration
fees of electric vehicles
to offset lost fuel-tax revenue.
Frustrated industry officials
say such a tactic is counterproductive
to EV adoption.
■ ■ ■
ing used vehicles. In some
cases, prices at auction for used
vehicles are at or above the
typical retail price, squeezing
dealer profits. Dealers begin
aggressively pursuing customers,
encouraging them to sell
their vehicles to put stock on
the lot. ■ ■ ■
The spring selling
season is expected to be in jeopardy
as those microchip shortages
hammer dealership inventories.
■ ■ ■
Meanwhile, experts
say the pandemic is expected
to unleash irreversible changes
on the industry as customers
demand new ways of doing
business, from contactless service
to online sales processes.
Parts Manufacturer's
Association to create a
made-in-Canada electric vehicle.
■ ■ ■
Inventory shortages
- the result of an unresolved
dearth of microchips - continues
to dominate headlines, with
some industry officials predicting
continuation into 2022.
JUNE
It's a triple whammy for dealership
construction as COVID19,
a move to online retailing
and a shift to EVs - albeit
a slow one - slams the
brakes on an auto-mall project
near Toronto. Newroads
Automotive Group was to
begin the biggest development
in its 58 years, but the project
is on indefinite hold. It's a reality
not limited to Newroads,
a Toronto dealership architect
says; the cost of building
a store has risen 15 to 20 per
cent because of pandemic-related
supply shortages. ■ ■ ■
As
Canadians begin to sense easing
pandemic restrictions and
are about to go on a spending
spree, economists warn dealers
they won't be the only ones
in a no-holds-barred battle to
tap into skyrocketing personal
savings. Dealers will compete
with travel, activities and other
big-ticket items. ■ ■ ■
Demand
for used vehicles south of the
border is bleeding away supply
at Canadian dealerships. J.D.
Power estimates as much as 25
per cent of vehicles that were
sold new in Canada could end
up in American driveways.
News Canada unveils its annual
list of 16 Canadians to watch,
from an event consultant for
Toyota to Rolls Royce's first
general manager for Canada.
■ ■ ■
Word leaks that U.S. automotive
retail giant Lithia
Motors is eyeing an expansion
into Canada, although it is
not yet known how that might
unfold.
AUGUST
As the industry considers a
move to a European style of
automotive retailing - dealers
act as agents and are paid a
commission and the automaker
owns any inventory - retailers
are concerned about what
such a shift could mean for the
valuation of their businesses
and whether there would
be compensation for orphaned
assets - dealerships and real
estate - that might no longer
be relevant. ■ ■ ■
The news
is either very good or very
bad for Stellantis's assembly
plant in Brampton, Ont., where
the plant's product mandate
is expected to end after 2023,
according to analysts. Options
range from closure to making
electric vehicles or EV
batteries. ■ ■ ■
Infiniti is offering
to let dealers consolidate
the Infiniti and Nissan brands
under one roof to save costs,
but dealers say a stalled rollout
of new vehicles is the bigger
problem facing the brand.
■ ■ ■
It becomes known that U.S.
retailer Lithia Motors is in
talks to acquire Canada's Pfaff
Automotive.
Automakers and suppliers
lament what wasn't and
will never be, as the microchip
shortage prevents 91,000 vehicles
from being built in Canada.
MAY
Is $40,000 extra per vehicle too
much for even the luxury market
to absorb? That's the issue
in British Columbia where a
new federal luxury tax - proposed
for Jan. 1, 2022 - coupled
with existing provincial
taxes would add 27 per cent to
the cost of a $150,000 vehicle,
and dealers are livid. ■ ■ ■
JULY
Aston
Martin Lagonda chief engineer
Fraser Dunn is announced as
the chief engineer for Project
Arrow, a $30-million initiative
spearheaded by the Automotive
The federal government accelerates
its goal of having a
zero-emissions mandate -
where all new cars sold in
Canada will be electric - to
2035 from 2040. Industry watchers
question the ability of the
country's electrical grid and
automakers to shift that far in
only 14 years. ■ ■ ■
Automotive
SEPTEMBER
The automotive industry -
from parts makers to automakers
to dealers - is wrestling
with the issue of mandatory
vaccinations for staff working
in company facilities. It's
a tightrope between protecting
employees' health and infring
Automotive News Canada - December 2021

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