Pandemic leads to low inventory at car dealerships

In this May 19, 2019, file photograph, a long line of unsold 2019 sedans sits at a dealership in Littleton, Colo. The annual survey by J.D. Power found that as the electronic safety systems find their way into more mainstream models, buyers are reporting more issues in their first three months of ownership. The problems are more than just a pain for new-vehicle owners. They affecting systems that are “critical for building consumer trust in future automated vehicles,” said Dave Sargent, J.D. Power’s vice president of global automotive. (AP Photo/David Zalubowski, File)

Saskatchewan auto dealers are having a tough time keeping up with demand for new vehicles.

Customers are back in full force, but a worldwide shortage of micro-chips has slowed production of cars and trucks.

Rob Greensides has been selling vehicles at Nelson GM for the past nineteen years. He said he has never seen new inventory this low.

“We have some trucks coming in but they’re basically sold as soon as they get here and are unloaded. People have already spoken for them,” Greenside said.

Demand for new vehicles in Saskatchewan was at pre-pandemic levels in March with just over 4,500 units sold, but sales have since slumped because of low inventory

The slump is the result of a worldwide microchip shortage. COVID-19 lead to an increase in demand for computers and cellphone which use the same chips as new vehicles.

“Profit margins for the microprocessor companies are a lot higher in the cellphone, computer (manufacturing) so they’re pushing more of their production into their higher-margin areas obviously and the automotive sector is suffering from it,” Curtis Nelson, general manager at Nelson GM said.

It has meant a shift in how new vehicles are sold.

“What’s happening is we have multiple other people saying if that person doesn’t take this truck, put my name on it next so I’ve looked in many of our truck orders, we have five to six people’s names on each vehicle,” Nelson said.

Carlot inventories aren’t expected to return to normal until next year, changing the way people shop for new vehicles this summer from browsing the car lot to ordering what they want from the factory.