Car sales lagging because of scarcity of semi-conductor

There is some action at the auto-port in Eastern Passage, N.S. as cars are shuffled around and loaded onto trains heading out of the province, but there are fewer vehicles here than there should be.

"We started first to see a reduction in production of vehicles, it would be about January of this year," says Shaun O'Regan, who owns car dealerships in Halifax. He says the pandemic caused people to stay close to home and vehicle purchases slowed, but the demand for personal electronic devices skyrocketed. That caused manufacturers to shift their production of a key piece of computer software.

"So, when they ramped up production, they were at a shortage of semiconductors," O'Regan says. "In addition to that, there have been supply problems with the semi-conductors at the different plants, There's not many semi-conductor plants in the world."

Dan Shaw, a marketing and consumerism expert at Dalhousie University says it's not just dealerships that are low on inventory. Anyone looking to rent a vehicle is also facing a shortage.

In the short term, in the spring and summer a lot of the dealerships were buying back cars from the car rental companies and now the car rental companies are realizing tourist season is starting to pick up and they need cars, says Shaw.

O'Regan says despite the lack of cars and trucks on site, most people who want to buy one can.

"Dealers are certainly selling cars," O'Regan says. "When you look, a lot of dealer lots you don't see vehicles there it doesn't mean that they can't get a vehicle. When a vehicle comes off the truck it's typically sold right away."

O'Regan says consumers should start to see a build up of inventory at dealerships within the next six months.