Canadian new-vehicle shortage to last ‘well into next year, if not 2024,’ expert says

At Hyundai Canada, a day doesn’t go by that CEO Don Romano doesn’t receive 10 to 20 calls from dealers searching for vehicles.

“These are tough times overall for the distribution system,” he said.

Hyundai’s customers face average wait times of six to eight months for electric vehicles, four to five months for utility vehicles and one to two months for sedans, Romano said.

While Hyundai globally purchased a supply of microchips last fall, “that only goes so far,” he said. “Now we’re fighting for every chip we can get. We’re in the same boat as everyone else.”

Hyundai and its sibling brand, Kia, were among the automakers that did not scale back microchip orders during the early stages of the pandemic. But Hyundai’s supply of chips is running thin, forcing the company to cut production, as other automakers have already done, said Bardwell.

Romano said: “We had a hurry-up offence [initially by not cutting back the purchase of microchips], but we’re not immune to the lack of chips.”


The irony of the current market is that vehicles that aren’t typically strong sellers are doing well because buyers will grab whatever they can get, Romano said.

“I believe our supply is well below our natural demand,” he said, referring to times when supply chains were healthy.

Kia Canada has temporarily stopped accepting new orders for certain vehicles, including the new Carnival minivan, said Andrej Kljajic, general manager of Gus Revenberg Kia in Windsor, Ont. Instead, potential customers are placed on a waiting list and contacted once the dealership can resume submitting orders to the automaker, he said.

The list of affected vehicles has changed over the past several months, Kljajic said.

Kia Canada said it expects inventory levels to improve by the second half of the year and it’s working to reduce “wait times during what is a very fluid situation due to the global chip shortage.”

“To best manage customer expectations and honour delivery times for specific models, dealers may temporarily pause orders on specific models until the inventory situation improves,” the company said in an email.

Toyota also reported that it had a sixmonth supply of chips last fall — now diminished.

In February, Ford Motor Co. announced that it was cutting production of the F-150 pickup, Mustang Mach-E, Bronco SUV and several other vehicles because of the chip shortage.

“When you have vehicles like the F-150 and [Chevrolet] Silverado being affected, you know you have a problem,” Fiorani said. “These are profitable vehicles.”

Some vehicles have been assembled but are being stored while they await vital microchips, said Bardwell. Others are being delivered with nonessential functions — such as heated seats and power door locks — nonoperational, he said. The promise is that they will be upgraded when the parts become available, Bardwell said.


Other vehicles are being delivered without some functions, such as fuel-saving cylinder deactivation and stop-start, Fiorani said. For those functions, he said, no plans are in place to restore them at a later date.

The more popular the vehicle, the longer the wait time for customers. At Rallye Motors Hyundai in Moncton, N.B., staff are telling customers to be prepared to wait up to two years for the new Ioniq 5 EV, said Mike Raby, director of sales.

Hyundai Canada CEO Romano says the actual wait is less.

“They may need to wait for the next model year on some models, but not two years.”

Many customers are willing to wait for their preferred vehicle, Bardwell said, but if they need a vehicle immediately — for example, to replace one involved in a crash — they take whatever they can get, often from any brand, he said.

If a lot has new stock, it’s usually just “a handful of vehicles,” said Michael Wyant, COO of the Wyant Group, which owns 29 locations in Saskatchewan, Alberta and British Columbia.

“You can [buy off the lot] in certain model lines,” Wyant said. “There’s other lines where [for example] you haven’t been able to buy a Super Duty off a Ford lot for two years now.”

Consumers appear to be resigned to the new normal, said UpAuto’s Carmichael.

“No one’s asking for a discount,” he said. “They’re recognizing these delays in other parts of their lives. It’s part of the world we live in. Everything is delayed.”

With files from Grace Macaluso and Greg Layson.

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