'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
More than half of Canadians say freedom of speech is under threat, new poll suggests
A new poll suggests a majority of Canadians feel their right to freedom of speech is in danger.
NEW Biscuits with possible plastic pieces, metal found in ground pork: Here are the recalls for this week
Here are the latest recalls Canadians should watch out for, according to Health Canada and the Canadian Food Inspection Agency.
Parents of infant who died in wrong-way crash on Ontario's Hwy. 401 were in same vehicle
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
Tiger Woods gets special exemption to U.S. Open at Pinehurst
Tiger Woods accepted a special exemption for the U.S. Open at Pinehurst No. 2, the first time the three-time champion has needed an exemption to play.
Wally, the emotional support alligator once denied entry to a baseball game, is missing
Emotional support animal registrations in the United States reached 115,832 last year, by an industry group’s count. But in the eyes of reptile rescuer Joie Henney, there’s only one: 'Wally Gator.'
Maple Leafs down Bruins 2-1 to force Game 7
William Nylander scored twice and Joseph Woll made 22 saves as the Toronto Maple Leafs downed the Boston Bruins 2-1 on Thursday to force Game 7 in their first-round series.
Britney Spears 'home and safe' after paramedics responded to an incident at the Chateau Marmont, source tells CNN
A source close to singer Britney Spears tells CNN that the pop star is 'home and safe' after she had a 'major fight' with her boyfriend on Wednesday night at the Chateau Marmont in West Hollywood.
WATCH LIVE Federal government to announce funding to help Toronto host six 2026 World Cup games
The federal government is set to announce funding to help Toronto host six matches at the 2026 FIFA World Cup.
Is your password 123456? Here's why you should make it stronger
With the sheer number of passwords needed today, it may come as no surprise that over 60 per cent of Canadians feel overwhelmed, and over a third reportedly forget their passwords monthly.