Sourcing woes linger in vehicle market: DesRosiers

Supply issues plagued new and used vehicle dealers in the first half of 2021, with dealers facing serious trouble sourcing pickups and SUVs, according to DesRosiers Automotive Consultants.

Comparatively, passenger cars were easier to obtain, with younger vehicles—both one-to-three and four-to-seven years old—were harder to source then older vehicles.

“The sentiments of used vehicle dealers paint a clear trend for the first half of this year,” said Andrew King, managing partner of DesRosiers Automotive Consultants. “Although sales volumes bounced back, limited supply led to clear increases in the prices of used vehicles as demand spiked and vehicles continued to flow south across the border.”

That’s according to a survey done by DesRosiers, in partnership with the Used Car Dealers Association, to track the impacts of the pandemic and microchip supply issues have had on the used vehicle market.

According to the organizations, nearly 500 UCDA members—including independent used vehicle dealers, and used vehicle operations of franchised new vehicle dealers—responded to the survey with their take on the first half of 2021.

The used vehicle market outperformed the new vehicle market in 2020 while the first six months of 2020 were still tough for used vehicle dealers, the survey said. Respondents said that average sales fell from 102.7 units in the first half of 2019 to 86.5 units in 2020. This average sales figure bounced back to nearly the same pre-pandemic levels—102.4 units on average—in the first half of 2021.

New car dealers exceeded their 2019 sales volumes while independent used car dealers noted a smaller recovery, according to the survey. This dynamic was related to access to vehicles in a market where demand often exceeded supply.

Among surveyed dealers, 6.2 per cent noted overall price decreases for used vehicles. The largest category, at 38.3 per cent, cited average price increases of 11 to 20 per cent. As well, 18.2 per cent of respondents cited price increases in excess of 20 per cent.