On Jan. 5, Ontario enacted sweeping restrictions yet again to slow the spread of the highly contagious Omicron variant of COVID-19. Several segments of the economy — such as theatres, bars and gyms — were closed.
Auto dealers are allowed to operate at 50-per-cent capacity. But the bigger concern remains inventory. “I would say the first quarter, based on inventory, is going to be very tough,” Alizadeh said. “I know that in our case — and I talk to a lot of colleagues, too — the next 60 days in January and February will be extremely tough to accommodate the needs of the marketplace.
“It’s tough enough to fill the back orders, let alone those who choose to get into the market now.”
In its monthly forecast at the end of the year, U.S.-based AutoForecast Solutions LLC said “the inventory issue remains on the scene” and called the shortage “a global problem that seems to be turning the corner, but it is far from solved.”
In her Jan. 5 Auto News Flash, Scotiabank’s Young said North American auto production had been improving through November, but from “seriously low levels and at a pace not yet leading to material changes in vehicle inventory levels.”
“The sudden surge in Omicron cases threatens to stall the nascent recovery in auto production in the early months of 2022 — which would, in turn, impact auto sales.”
ENOUGH DEMAND FOR PRE-PANDEMIC SALES LEVELS
Young forecasts 1.75 million units in 2022 — an increase of 5.4 per cent over 2021 — but said that could easily surpass 1.9 million without delivery and production disruptions. Sales in pre-pandemic 2019 topped 1.94 million. Young cautioned that 2022 will be a roller-coaster ride and therefore difficult to predict.
DesRosiers Automotive Consultants estimated that December sales fell 4.5 per cent from a year earlier to 102,919. Monthly figures are estimates because most automakers report quarterly and not monthly.
Shortages on opposite ends of the buying process hindered sales the past two years. In 2020, Canadians couldn’t leave their homes much to visit dealerships, as provincial and territorial governments enacted strict public health measures to flatten the COVID-19 curve early. And in 2021, while people returned to work — and shopping — new vehicles were few and far between because of bottlenecks in the supply chain and shortages of semiconductors.
“While 2020 was a year beset by demand problems, 2021 was hit by problems on the supply side of the equation,” said Andrew King, DesRosiers managing partner.
FORD RALLIES TO STAY NO. 1, BEATING OUT TOYOTA
Ford Motor Co. was the top-selling automaker of 2021, increasing sales 1.7 per cent to 243,447 units and topping Toyota’s 225,215, according to the Automotive News Research & Data Center in Detroit.
Ford had to rally to pass the Japanese automaker, which was the No. 1 seller in the United States in 2021, ending General Motors’ 90-year run as king south of the border. Ford trailed Toyota by 1,228 units in Canada through the first three quarters but has been the top-selling automaker in Canada for 13 consecutive years.