'Not moving': why those in the auto industry predict a rough ride for Canadians in 2023
Whether you're interested in buying, renting or repairing, automotive experts are warning Canadians entering the vehicle market to bring extra money -- and patience.
Ongoing supply chain issues impacting inventory and pricing have slowed somewhat, but data suggests it could still be a rough ride for prospective car buyers deep into 2023.
BUYING
Buying a new vehicle is a lot more expensive than it used to be, and a large chunk of that can be blamed on a slow supply chain.
The semiconductor chip shortage that has punished the auto sector since 2020 is still around, which is impacting supply and driving prices sky high.
A November report from Statistics Canada says over the first 11 months of 2022, 6.9 per cent fewer new vehicles were sold in Alberta. The same report says the average price rose 10 per cent over the same period.
"The shortages is an ongoing problem," ATB Financial economist Rob Roach said. "It hasn't worked itself out yet. I think there's a light at the end of the tunnel, but it might still take a large portion of this year before supply is really able to bounce back."
Until then, expect new and used lots to remain half-full, and price tags to remain eye-popping.
Roach tells CTV News he believes it could take until 2024 for the sales market to look somewhat normal once again.
"Higher interest rates and borrowing costs will start to bite into demand because it'll just be more expensive to finance," he predicted.
RENTING
Rental agencies are also having a tough time.
In the early months of the pandemic, operators reduced their inventory, anticipating a drop off in demand.
But when travel demand shot back up in the summer of 2021, rental car companies couldn't get enough vehicles in time to meet the need.
Because of persisting demand problems, many lots are still not replenished. And trying to do so can be costly.
"What's happening lately is a lot of the fleets are being purchased at much higher cost structures than traditional," Associated Canadian Car Rental Operators' Craig Hirota said. "It's going to really force the industry to try to maintain pricing at higher than historical levels."
That's led to a slow winter season for operators, and not a lot in the way of optimism approaching spring.
"I think supplies will be still tight, but they will be better than they were last year and the year before," Hirota said. "It's been hard."
REPAIRING
Many Canadians hoping to avoid the buying and renting markets have decided to upgrade their current vehicles.
But parts aren't immune from the messy supply chain.
In many places across Canada, the cost to have parts shipped exceeds the price to make the repair.
"Our margins are slim to none," Mechanigo Auto Repair owner Nav Khiljie said. "And we don't want to turn around and tell the customers that their price is way up. That's not fair for them."
Khiljie says shipment delays have also put him in a tricky spot.
Much of his time is spent explaining to Calgarians that their problems aren't stemming from anything he's doing -- or anything other local shops are.
"We're trying to cater to customers, but right now we don't know when we are going to get supply," he said. "We're kind of stuck."
SOLUTIONS?
Natural solutions could be on the way, but industry experts reiterate 2023 will be a bumpy trip.
Their advice to consumers looking to buy, rent or repair: if possible, shop around.
The market is flush with options, and planning ahead of time should give Canadians the leeway they need to find the right place -- and way -- to spend their money.
CTVNews.ca Top Stories
B.C. serial killer Robert Pickton dead following prison attack
Convicted B.C. serial killer Robert Pickton, who preyed on women he lured from Vancouver's Downtown Eastside to his rural pig farm, has died.
'We will go with the majority': Liberals slammed by opposition over proposal to delay next election
The federal Liberal government learned Friday it might have to retreat on a proposal within its electoral reform legislation to delay the next vote by one week, after all opposition parties came out to say they can't support it.
Ex-husband charged with murder in death of Lumby, B.C., woman
The ex-husband of Tatjana Stefanski – the woman whose disappearance and death set the small town of Lumby, B.C., on edge last month – has been charged with her murder.
Oilers beat Stars, one win away from Stanley Cup berth
Ryan Nugent-Hopkins scored two power-play goals as Edmonton smothered the Dallas Stars 3-1 to take a 3-2 lead in the NHL's Western Conference final on Friday.
Baby dead after being delivered via emergency C-section to woman who was in police custody
A newborn is dead after being delivered via emergency C-section to a woman in police custody.
Jennifer Lopez cancels summer tour: 'I am completely heartsick and devastated'
Jennifer Lopez has cancelled her 2024 North American tour, representatives for Live Nation confirmed to The Associated Press.
This Calgary home has a giant tree in the middle, and it's for sale
There's a luxury 'tree home' for sale in Calgary.
DND moving 1,000 employees out of Ottawa office building due to safety concerns
The Department of National Defence is moving approximately 1,000 employees out of an office building in Ottawa's Lowertown neighbourhood, citing safety concerns for its employees.
Man convicted of killing Toronto cop in 1980 granted day parole
A man convicted of murdering a Toronto police officer more than four decades ago has been granted day parole for six months.