(Photo 82106825 © Ifeelstock | Dreamstime.com)

By Ian Gustafson

Lack of Inventory

Local automotive industry impacted by microchip shortage caused by the COVID-19 pandemic

Sep 14, 2021 | 8:00 AM

Car dealerships in Saskatchewan and around Canada have been impacted by a shortage of crucial car components including microchips due to the COVID-19 pandemic, and that’s caused dealerships to have less new vehicles on the lot.

Terry Gerlach, general manager at Kia of Prince Albert explained when they order vehicles, they are having to wait two to three months. The volume they are able to order has also changed.

“Normally we would order 15 to 20 units a month and now we’re ordering three to four units per month,” he said. “Sorento, which is our number one seller, right now we have zero Sorento’s on hand and we’re having a hard time keeping them available.”

For the time being they’re filling their lots with used vehicles while they wait for whatever new ones they can get. They’ve also made pre-buying new vehicles an option; however, the customer could be waiting multiple months before they receive it.

“It’s definitely a new buying curve and it’s probably going to be this way for another six months or so,” he said.

Court proceedings

'The impact of this trauma will echo for generations': court case surrounding La Ronge woman's death reaches conclusion

12m ago

Going Global

P.A.'s Zablocki named to Team Canada for U18 Women's World Championships

35m ago

Election 2024

Birch Hills staff won't share election decision

1h ago

Gerlach added the microchip shortage in certain vehicles depends on where they are coming from. For example, there are fewer Sorento’s because they’re manufactured in the U.S. where there is also a microchip shortage.

Lakeland Ford General Manager Brad Thibaudeau said the inventory levels for dealerships including Ford have been lower.

“There’s dealers, especially the smaller dealers in the surrounding communities that are maybe in smaller towns they’ve been really hit hard by this you know there’s a lot of empty lots in the small towns outside of P.A,” he said.

He explained the microchips are used for the computers that control all the various functions in the vehicles. They’re the same chips that power, cellphones, and computers – another product experiencing production delays due to a growing demand from people working from home.

“The demand for the microchips has risen dramatically however the manufacturing hasn’t caught up to that,” he said. “There’s thousands of chips in a vehicle now it’s not like it’s one or two there’s thousands of them and unfortunately there’s not as many for sale anymore.”

Thibaudeau said, as a larger dealership Lakeland Ford has been fortunate. Thanks to a strong year of sales in 2020 and the first quarter of 2021 they’re being allocated significantly more vehicles than other Ford dealerships in Western Canada, so they haven’t felt the effects of the microchip shortage as bad as others.

He said a huge part of their clientele are healthcare workers, and others who haven’t been affected by the pandemic job shortages.

“These are typically our customers anyway and now they don’t have anywhere to go,” he said. “It’s tougher to travel to Mexico so people obviously need to spend their hard-earned money on something that makes them happy, and a vehicle purchase is one of the more fun and exciting things that a person could do.”

While it may take the microchip production several months to rebound, Thibaudeau did encourage anyone who’s found a vehicle to jump on it.

“Because it might not be there tomorrow,” he added.

–

Ian.Gustafson@pattisonmedia.com

On Twitter: @IanGustafson12