Automotive News Canada - January 2022 - 22

22
* JANUARY 2022
2022 sales: The first quarter will be 'very tough'
CONTINUED FROM PAGE 1
variant of COVID-19. Several segments of the economy -
such as theatres, bars and gyms - were closed.
Auto dealers are allowed to operate at 50-per-cent
capacity. But the bigger concern remains inventory.
" I would say the first quarter,
based on inventory, is going to be
very tough, " Alizadeh said. " I know
that in our case - and I talk to a lot
of colleagues, too - the next 60 days
in January and February will be
extremely tough to accommodate the
needs of the marketplace.
" It's tough enough to fill the back
orders, let alone those who choose to get into the market
now. "
In its monthly forecast at the end of the year, U.S.based
AutoForecast Solutions LLC said " the inventory
issue remains on the scene " and called the shortage " a
global problem that seems to be turning the corner, but it
is far from solved. "
In her Jan. 5 Auto News Flash, Scotiabank's Young
said North American auto production had been improving
through November, but from " seriously low levels
and at a pace not yet leading to material changes in vehicle
inventory levels. "
" The sudden surge in Omicron cases threatens to stall
the nascent recovery in auto production in the early
months of 2022 - which would, in turn, impact auto
sales. "
TOP-10 SALES LEADERS
12 mos.
2021
12 mos.
2020
12 mos.
per cent
change
Ford Motor Co. 243,447 239,368 1.7%
Toyota Canada 225,215 191,420 17.7%
General Motors
217,475 218,501 -0.5%
Hyundai-Kia 210,377 186,272 12.9%
Stellantis
Honda Canada 147,658 140,243 5.3%
VW Group
98,757 83,607 18.1%
Nissan Group 98,405 88,450 11.3%
Mazda Canada
Subaru
Source: Automotive News Research & Data Center.
62,201 57,773 7.7%
56,870 52,129 9.1%
162,063 179,110 -9.5%
AutoForecast Solutions doesn't
foresee immediate relief for empty
dealership lots, calling the inventory
shortage " a global problem that seems
to be turning the corner, but it is far
from solved. "
COMPLETE
QUARTERLY
SALES STATS
P24-25
ENOUGH DEMAND FOR PRE-PANDEMIC SALES LEVELS
Young forecasts 1.75 million units in 2022 - an
increase of 5.4 per cent over 2021 - but said that could
easily surpass 1.9 million without delivery and production
disruptions. Sales in pre-pandemic 2019 topped 1.94
million. Young cautioned that 2022 will be a roller-coaster
ride and therefore difficult to predict.
DesRosiers Automotive Consultants estimated that
December sales fell 4.5 per cent from a year earlier to
102,919. Monthly figures are estimates because most automakers
report quarterly and not monthly.
Shortages on opposite ends of the buying process
hindered sales the past two years. In 2020, Canadians
couldn't leave their homes much to visit dealerships, as
provincial and territorial governments enacted strict
public health measures to flatten the COVID-19 curve
early. And in 2021, while people returned to work -
and shopping - new vehicles were few and far between
because of bottlenecks in the supply chain and shortages
of semiconductors.
" While 2020 was a year beset by demand problems,
2021 was hit by problems on the supply side of the equation, "
said Andrew King, DesRosiers managing partner.
FORD RALLIES TO STAY NO. 1, BEATING OUT TOYOTA
Ford Motor Co. was the top-selling automaker of 2021,
increasing sales 1.7 per cent to 243,447 units and topping
Toyota's 225,215, according to the Automotive News
Research & Data Center in Detroit.
Ford had to rally to pass the Japanese automaker,
which was the No. 1 seller in the United States in 2021,
ending General Motors' 90-year run as king south of the
border. Ford trailed Toyota by 1,228 units in Canada
through the first three quarters but has been the top-selling
automaker in Canada for 13 consecutive years.
" With all of the challenges that faced Canadians
in general and our industry specifically, one thing
remained true through 2021 - consumers continue to
trust Ford to deliver the vehicles and services they are
looking for more than any other automotive brand, " Ford
Canada CEO Bev Goodman said in a statement.
Toyota Canada declined to comment.
GM placed third with 217,475 vehicles sold in 2021.
" Despite continued inventory constraints the industry
PHOTO: JEFF MELNYCHUK
faced in 2021, GM delivered strong year-end sales results
thanks to high customer demand across our portfolio, "
Sandor Piszar, GM Canada vice-president of sales, service
and marketing, said in a statement.
SOME BRANDS POSTED GREAT GAINS
Success stories were hidden among the crises that battered
the industry. Kia Canada generated 79,198 sales,
making 2021 the best year on record for the brand. Kia
and its South Korean cousin, Hyundai, both weathered
the microchip shortage early on in
2021.
" As we look forward to 2022, consumer
demand remains exceptionally
high, leaving us optimistic for the
year ahead with new ... models like
the ... Kia EV6, set to arrive in dealerships
[early in 2022], " Kia Canada
COO Elias El-Achhab said in a statement.
El-Achhab:
Vehicle
demand
is high, leaving
Kia " optimistic "
about 2022.
FILE PHOTO
Meanwhile, Subaru Canada posted
a 9.1-per-cent gain over 2020, with
56,870 units sold in what the brand
called a " tumultuous year. "
There's a lesson to be learned
from the inventory shortage, said
Alizadeh of Downtown Auto Group.
" As an industry, both as retailers
as well as [automakers], we learned that we don't have
to pile up hundreds and hundreds of vehicles in our
yards and in our lots for us to accommodate the consumer
needs, " he said.
The ideal business model falls somewhere between
the just-in-time delivery created by empty lots and the
overflowing lots of the past, said Alizadeh. He'd like to
get back to something closer to the previous system, but
with some tweaks.
" At some point, " Alizadeh said, " there has to be a
much better balance between the supply chain and its
ability to produce the bare minimum. If there's one
thing I would like to get back to, it's the ability to decide
internally what those inventory levels and the numbers
should be, as opposed to being at the mercy of COVID
and chip shortages and plant shutdowns. " - ANC
Oakville is in line for five EVs; Aviator, Explorer are possibly two
CONTINUED FROM PAGE 3
Edge and Lincoln Nautilus crossovers,
which are expected to be discontinued so
the plant can be retooled
for EV production in
2024. Ford promised to
invest $1.8 billion in
Oakville and build five
electric models there by
2027 as part of its 2020
contract with Unifor, the
union representing the
auto workers.
It would be the easiest
fit, Drake said, since
Oakville is scheduled to
use Ford's next-generation
EV-dedicated architecture
and wouldn't
require as much additional
investment as other
North American plants.
Ford plans 300,000
Fiorani:
Concentrating
EV production
in Oakville
makes sense
for the supply
chain that
would feed
the plant.
FILE PHOTO
units annually, said Fiorani,
AutoForecast's vice-president of global
vehicle forecasting. That capacity would
allow the Explorer, Aviator and Lincoln
Corsair to slot alongside other nameplates.
Because the plant is in line for five
EVs, concentrating production in Oakville
also would make sense from a supply
chain perspective, Fiorani said.
U.S. OPTIONS FOR LOCATIONS
Ford doesn't plan to build the Explorer
and Aviator EVs in Chicago alongside
their gasoline-powered counterparts
because that plant is near capacity. A new
EV assembly plant that will be part of the
massive Blue Oval City complex which
Ford is building in Tennessee will make
a next-generation F-Series product and
won't come online until 2025.
Ford could consider building the electric
crossovers in Ohio, where it previously
planned to do so. Ohio Assembly, west
of Cleveland, builds some larger Super
Duty pickups and E-Series vans.
In its 2019 contract with the UAW, Ford
promised that the plant would receive
a US $900-million investment. Included
in that plan in 2023 was a " next-generation
product, " which sibling publicaIn
its 2020 contract with Unifor, Ford
committed to a $1.8-billion investment
in Oakville Assembly to build electric
vehicles. So far, none have been
assigned to the plant.
PHOTO: GREG LAYSON
tion Automotive News reported were the
Explorer and Aviator EVs.
Ford shifted those plans to Mexico
in 2019, prompting fiery criticism from
Gerald Kariem, then-UAW vice-president.
The automaker said it would keep its commitment
to the Ohio plant by boosting
Super Duty production there.
Should Ford flip-flop again by moving
the work back to Ohio, Drake said,
it would need to spend big to convert the
plant for EVs and boost its yearly capacity
from 60,000 today. " Those are not insurmountable
challenges, " she said.
Another U.S. option is the underused
Mustang plant in Flat Rock, Mich., south
of Detroit. Ford has capacity to build
260,000 vehicles a year there, LMC says,
but runs the plant on only one daily shift.
Michigan politicians are working on legislation
to attract major investments after
the state failed to make a serious bid for
Blue Oval City.
Picking either Flat Rock or Ohio
Assembly would let buyers of those vehicles
qualify for up to US $4,500 in extra
government tax credits, should the Biden
administration's proposed legislation
make it through Congress.
" Losing out on that extra couple of
thousand dollars per vehicle could hurt, "
Drake said. " It's part of the conversation
for sure. " - ANC
- With files from Grace Macaluso
Automotive News Canada - January 2022

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