Toronto new car dealers clam up as lots sit empty

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It’s a problem many Toronto-area car dealerships don’t appear willing to talk about.

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With new car lots becoming more sparse by the week, dealerships contacted by th e Toronto Sun over the past several days either declined comment or refused to return phone calls when asked about inventory shortages.

Even the Trillium Automobile Dealers Association —  an advocacy group representing Ontario’s new car dealers — refused to answer multiple calls and emails.

That came of little surprise to Rotman School of Management Professor Dimitry Anastakis, who described the pandemic, the worldwide computer chip shortage, and the supply chain crisis as a “perfect storm” for the car industry.

“I can understand completely why no dealership really wants to talk about this,” he told the Sun.

“It is a real problem.”

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Anastakis possesses first-hand knowledge of the problem as he recently purchased a new car.

“I couldn’t get a wireless charger for my phone; they said they’re not offering that because they’re trying to save the chips,” he said. “This is happening all over the place.”

For the car industry, the chip shortage initially prompted makers to hold back certain features or options.

That’s now turned into full-blown parts shortages, forcing carmakers to ramp down production and leaving dealerships with dwindling inventories.

For those looking to buy a new car, Anastakis said, the days of being able to order exactly what you want from the dealership are over.

All of this has Canadian new car production down between 200,000 and 400,000 vehicles so far in 2021.

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Earlier this year, GM and Ford announced they were ramping-down production across their North American plants — Ford idled its Windsor assembly and engine plants in February, and again in May, while GM shut down its CAMI plant in Ingersoll from February until June, just prior to an extended summer break.

Similar shutdowns were seen at Chrysler plants in Windsor and Brampton.

As the coronavirus spread across Asia, lockdowns at semiconductor plants constricted world computer chip supplies, already in high demand as manufacturers struggled to keep up with the demand for electronics purchases by people confined at home during the pandemic.

Fewer were hit harder than the auto industry, a problem exacerbated by a March 2021 fire at Japan’s Renesas Electronics Corp., responsible for 30% of the world’s automotive microcontrollers.

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That happened around the same time as the grounding of the container ship, Ever Given, which shut down the Suez Canal for six days, nearly triggering the collapse of world-wide shipping.

Enter the 2021 supply chain crisis, and new car deliveries are at a near-standstill — not only completed units from overseas, but foreign-built parts used in domestic production.

On Friday afternoon, a quick count on the ship-tracking website, VesselFinder, showed more than 60 container ships at anchor 30 nautical miles off the ports of Long Beach and Los Angeles — with some waiting for weeks for a berth.

One vessel, the ZIM Virginia, arrived off the coast of the Port of Los Angeles — America’s busiest port — on Nov. 3 after departing Kaohsiung, Taiwan, Oct. 19.

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The problem doesn’t end once ships offload — trucking and railway bottlenecks are causing ports to choke on countless stacks of containers awaiting transport.

Port delays have also triggered a shortage of empty containers overseas, leaving shippers nothing to transport their goods in.

It’s also a problem that isn’t going to solve itself overnight.

“Our supply chain is so complicated, in terms of all the parts that are required to build a vehicle,” Anastakis said.

“You’re seeing firms and governments saying we need to shorten these supply-chain waits because you’d rather be much more dependent on just getting yourself within continental North American than having to get pieces from Europe or Asia.”

bpassifiume@postmedia.com
On Twitter:  @bryanpassifiume