Say ‘so long’ to the spring selling season, and maybe fall, too

Typically, April though June the busiest months when it comes to new-vehicle sales. Fall is traditionally busy, too, as vehicles for the next model year begin to arrive.

But the global microchip crisis, war in Ukraine and bottlenecks throughout the supply chain have left dealers without knowing when or how many vehicles will be delivered to their lots.

“I don’t know what the busy season is anymore,” Wyant Group COO Michael Wyant told Automotive News Canada. “We’re in this new world where we’re not stocking up for spring selling season. We’re selling everything as it arrives because it was already sold weeks or even months in advance.”

The busy period, Wyant said, “is basically whenever the seasonality of production hits the dealership, and that’s based on what the manufacturers are able to produce.”

The Wyant Group sells 13 brands at 29 locations across Western Canada.

Wyant called the inventory situation fluid and said dealers have had two years to adapt.

“So your May, June might not be your busiest volume months depending on what constraints that OEM faced in the months prior during production,” Wyant said.

Global auto output has been hampered by a myriad problems of the last two years. For example, there was a time during the war in Ukraine that cheap wire harnesses made in that country were scarce. And last year, a freak winter storm in Texas caused a shortage of seating foam.


“Busy selling seasons are not something that we’re gearing up for anymore. We just know how many cars are coming in on a given month are supposed to come in that month,” Wyant said. “We manage our business according to that.

“But it’s not a ramup in staffing. It’s not a ramp-up in inventory. It’s not a ramp-up in marketing anymore. It’s just that consistent management of the business that’s been going on for a couple of years, though.”

DesRosiers Automotive Consultants (DAC) said Canadian auto sales were down an estimated 8.5 per cent in May compared with a year earlier as supply challenges persist.

DAC estimated that automakers sold 140,725 new light vehicles in the month, in line with sales for the previous two months. Monthly sales are estimates now that most automakers have moved to quarterly reporting.

May has historically been the top sales month, but supply challenges, linked in part to semiconductor chip shortages, continue to hamper a rebound.

By comparison, in May 2019 — the last May before the COVID-19 pandemic began in 2020 — there were more than 202,000 light vehicles sold in the month.

DesRosiers said the seasonally adjusted annual rate of sales for May came in at 1.36 million vehicles.


Andrew King, managing partner of DesRosiers, said that the rate has continued to fall each month throughout the year from 1.67 million in January, indicating that the vehicle supply situation appears to be worsening.

Scotiabank on May 31 issued a warning about interest rates in its Global Auto Report.

“Financing costs have gone up in recent months, adding to rising affordability challenges in the U.S. and Canada,” the financial institution said.

The latest data from J.D. Power shows a sharp rise in new-vehicle transaction prices.

April new-vehicle price inflation was 7.5 per cent year over year in Canada, and 13.2 per cent in the United States. May data isn’t yet available.

Scotiabank said, “Strong household balance sheets, along with substantial pent-up demand, should provide a buffer for these challenges.”

However, “with supply-side factors still limiting the recovery, the impact of higher ownership costs on actual sales is likely to be felt when production catches up.”

Automakers also face soaring production costs, which will likely be passed on to consumers, Scotiabank said.

“The producer price growth for motor vehicle parts has been accelerating in both the U.S. and Canada, reflecting rising raw material prices and energy costs.”

Wyant said the current business model of customers placing factory orders is “profitable enough,” mitigating carrying costs and advertising costs because fewer cars are on the lot.

“On lower volume, obviously, margins have gone up on a per-unit basis incrementally this year, even versus last year,” he said. “I think all dealers have adjusted to [the new business model] because it has been going on for so long. But this has become our new reality.”

Wyant said it might take six to eight weeks for an order to arrive. In the meantime, he has just one week of inventory on the ground.

“Customers now have become much more accustomed to looking at what we have on the lot so that they can potentially test drive something and get a feel for it. And then just going into the order bank.”

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