The ongoing inventory squeeze has put the onus on dealers, often working with their automakers, to find ways to hang on to new-vehicle customers and shore up dwindling stock on their used-vehicle lots.
Erin Mills Mazda in Mississauga, Ont., is trying to replenish its supply of used Mazda3 sedans by offering customers with two years remaining on their leases the opportunity to break their contracts with little or no penalty as long as the vehicle has retained its market value.
General Sales Manager Aman Soos said the automaker is helping by providing incentives, such as offering existing Mazda3 lessees an opportunity to buy into a newer version of the car for a similar payment, downgrade to a lower model with a reduced payment or simply turn in the car without having to buy or lease another one.
“We’re always looking for what opportunities we have and where can we help out our customers as well,” said Soos.
The used-car market for the Mazda3 has been “hot.”
Soos said his dealership normally has 40 to 50 used cars, 80 per cent of which are Mazda3s. But that inventory has been cut in half because of an overall used-vehicle shortage.
The global auto industry, which has yet to recover from production shutdowns at the start of the pandemic last year, is grappling with a worldwide scarcity of microchips, used in numerous vehicle components and systems. That shortage has had a ripple effect on the availability of used vehicles amid rising consumer demand.
WILLING TO CUT PROFITS
Ravi Menon, dealer principal of Erin Mills Mazda, said the dealership is prepared to buy out lease customers even if means cutting its profit margin.
“We did this so we could get more cars and help our guests because they are going to come back to us anyway once everything settles down,” he said. “We put less profit in our pockets to help Mazda guests as much as possible. I told [staff] particularly when COVID started, even, it means breaking even, get this car into the lot. We bought a lot of cars that way.”