Light trucks have extended their domination in the new vehicle market, continuing to account for the vast majority of sales.

At the same time, the luxury vehicle market is retreating, according to data from DesRosiers Automotive Consultants.

New light vehicle sales in Canada grew by 4 per cent in the third quarter of 2024, contributing to a year-to-date increase of 8.1 per cent. However, the passenger car segment continues to shrink, reporting a 10 per cent decline in Q3 and a 3 per cent decrease so far this year.

This shift has resulted in light trucks accounting for a dominant 86.4 per cent of the market, leaving just 13.6 per cent to passenger cars.

One of the standout trends this year has been the continued strength of small mainstream SUVs. Both subcompact and compact SUV segments have posted significant year-to-date gains, with increases exceeding 20 per cent. In Q3, compact SUVs saw rising sales, while subcompact SUVs experienced a slight dip but maintained strong year-to-date growth.

Unexpectedly, DesRosiers reported, small vans — which have steadily lost ground to SUVs over the years — saw a resurgence, posting a 17 per cent increase in sales compared to the same period last year.

But the luxury market is stumbling, proving to be a weak spot in 2024. Combined, luxury segments experienced an 8.5 per cent decline in Q3 and a 2.4 per cent decrease year-to-date. Only compact and intermediate luxury SUVs showed modest growth, up 2.6 per cent and 1.7 per cent, respectively.

Andrew King, managing partner at DesRosiers, attributed this pullback to a combination of high vehicle prices and rising interest rates.

“The luxury segments have seen long-term structural growth over the past two decades as baby boomers accumulated wealth,” King said. “Faced with high vehicle prices and high interest rates consumers have pulled back from luxury in 2024. It will be interesting to see if this is a temporary pause or the start of a longer-term market shift.”

Image credit: Depositphotos.com

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BYD has toppled Tesla as the top manufacturer of electric vehicles in a new ranking released by ABI Research.

A recent competitive assessment by the global technology intelligence firm narrowly placed BYD ahead of Tesla. The assessment provides an in-depth examination of the products offered by 18 OEMs across a wide range of criteria.

The companies evaluated and ranked are categorized into three groups:

• Market Leaders: BYD, Tesla
• Mainstream: GAC Aion, General Motors, Hyundai-Kia, Stellantis, Volkswagen, XPENG, ZEEKR
• Followers: BMW, Ford, Honda, Mercedes-Benz, NIO, Nissan, Renault, Toyota, Volvo

“The EV market is rapidly growing and is the clear future of the automotive industry,” explained Dylan Khoo, industry analyst at ABI Research. “OEMs have had widely differing responses to the EV transition as an opportunity and a challenge; some have fully embraced the technology, while others are being dragged into it against their wishes. This is reflected in their innovation and implementation capabilities,” explains

The analysis was based on nine criteria, segmented between innovation and implementation clusters. These included the OEMs’ battery technology, platform design, coverage of different vehicle segments, and electrified share of sales. BYD and Tesla stand out as the overall market leaders, with electric-only brands from China such as ZEEKR, XPENG, and GAC Aion also notable for their strong performance in the innovation rankings.

BYD, the Chinese OEM, has taken the top spot ahead of Tesla, which scored highly in vehicle range, platform innovation, and fast charging capabilities. BYD, however, significantly outperformed Tesla with its degree of vertical integration and the number of models it offers in different segments.

BYD, however, is not sold in North America as passenger vehicles. Federal leaders in both Canada and the U.S. placed 100 per cent tariffs on Chinese exports of Chinese-made EVs, aluminum and steel.

“The automotive industry is in a state of transition, and this assessment demonstrates the varying capabilities of OEMs as they try to make it through this period and come out on top. In some areas, the new upstart EV brands are a generation ahead of many ‘legacy OEMs’. The incumbents must look to technology solutions providers to revolutionize their capabilities and ensure they can maintain their position as the industry electrifies,” Khoo observed.

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New analysis from S&P Global Mobility reveals a significant rise in brand loyalty rates within the automotive industry for the first half of 2024, marking the first year-over-year increase since 2020.

Industry brand loyalty rates have trended upward in the first half of 2024, following several years of flat or declining values, S&P Global Mobility reported.

The industry’s brand loyalty rate through June stands at 52.5 per cent, reflecting a 1.9 percentage point (PP) improvement over the same period in 2023. This marks the first year-over-year increase since 2020, which the group called a positive sign for the industry after several years of lower loyalty levels due to inventory shortages and post-pandemic recovery.

More than half of all brands in the industry saw a year-over-year increase of 1 percentage point or better. This group included both mainstream and luxury brands, which saw increases of 1.9 PPs and 1.4 PPs, respectively. Growing inventory levels and a strong pipeline of return-to-market households were the primary factors in loyalty gains for the first half of 2024.

“Last year we saw a big jump in the number of households returning to market for a new vehicle, but the inventory was lacking,” said Vince Palomarez, associate director of loyalty product management at S&P Global Mobility. “This year, return-to-market volume remains consistent; however, inventory levels are up more than 40 per cent, so households have more opportunity to remain loyal to their previous brand.”

Among individual brands, Tesla continues its run as the leader in brand loyalty with a rate of 67.8 per cent for the first half of 2024. While all Tesla models retain more than 60 per cent of their previous owners, the Model 3 remains the leader in the brand’s lineup with a loyalty rate of 72.1 per cent.

“Tesla has historically been a brand with strong loyal ties among their consumer base, despite a limited product portfolio,” said Palomarez. “Changes in BEV prioritization among other OEMs, along with Tesla’s directive to cut pricing when needed, has kept households from defecting.”

The group also noted that General Motors leads all multi-brand manufacturers in manufacturer loyalty for the first half of 2024, at 67.7 per cent.

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A recent MIT study has found that high temperatures inside vehicle cabins during hot summer days significantly increase the levels of volatile organic compounds (VOCs), posing potential health risks to occupants.

A new study by researchers at the Massachusetts Institute of Technology (MIT), Cabin air dynamics: Unraveling the patterns and drivers of volatile organic compound distribution in vehicles, published in the journal PNAS Nexus emphasized the critical role of material surface temperature in driving VOC emissions, challenging the previously held belief that air temperature was the primary factor.

The research team, led by Rui Zhang and included Minglu Zhao, Hengwei Wang, Haimei Wang, Hui Kong, Keliang Wang, Petros Koutrakis, Shaodan Huang and Jianyin Xiong, looked at VOC levels inside a new car over seven summer days. They found that formaldehyde concentrations were notably high, with about one-third of the readings exceeding the standard limit for in-cabin air quality.

The study’s findings are particularly concerning for new vehicles exposed to high temperatures, which can exacerbate the “new car smell” often associated with VOC emissions. The researchers discovered that material surface temperature, rather than air temperature, is the most significant factor influencing VOC emission behaviours.

The report observed that the implications of this research are significant for both the automotive industry and public health. High levels of VOCs can have adverse health effects, including respiratory issues and other long-term health problems. It outlined that by identifying material surface temperature as a key factor in VOC emissions, manufacturers can design vehicle interiors to minimize harmful exposures, especially during hot summer months.

VOCs, emitted from various materials and products within vehicle cabins, pose a significant risk to occupants, particularly in high-temperature conditions. Understanding the factors that influence VOC emissions is essential for developing strategies to reduce exposure and improve overall air quality.

The research team hoped their findings lead to more informed decisions in vehicle design and air quality management.

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Despite a dip in September sales, Canada’s auto market maintains a robust year-to-date growth, driven by strong performances from key brands.

Canada’s automotive market experienced a slight setback in September, with sales of new vehicles dropping 3.6 per cent compared to the same month last year.

This downturn comes after a warning from DesRosiers Automotive Consultants last month about the challenges of sustaining year-over-year gains in the final months of 2024.

Andrew King, managing partner at DesRosier, noted two reasons for the September market decline. One, September 2023 marked the early stages of when vehicle availability improvement was widely seen in the market.

“So it does present a fairly strong comparable,” he noted.

Secondly, the timing of this year’s Labour Day holiday meant there were three fewer selling days in 2024 compared to last year.

These factors combined to create a challenging month for the market, although the seasonally adjusted annual rate (SAAR) for September remained steady at 1.78 million units, consistent with July and August figures.

Despite the September dip, the year-to-date performance of the market remains impressive, the consultancy noted. By the end of the third quarter, the market had reached 1.41 million units, an 8.1 per cent increase from the first nine months of 2023.

Several brands have shown growth during this period. Volkswagen leads the market in percentage gain among higher volume brands, with a 55.8 per cent increase in 2024. Subaru and Mazda also posted strong performances, up 31.7 per cent and 26 per cent respectively, both surpassing the 50,000 sales mark YTD. General Motors (GM) leads in volume, with sales of 216,000 units, a 9.7 per cent rise from 2023.

However, DesRosiers did point out that the luxury segment is still facing difficulties in 2024, a trend that it plans to dig into.

The streak of increased year-over-year sales ended in June as 2024’s numbers matched 2023, however, it was seen as a blip at the time as outside factors, led by a cybersecurity incident, dampened sales numbers.

As the market moves forward, DesRosiers will closely monitor several key economic indicators, including employment data, Consumer Price Index (CPI) data and a Bank of Canada interest rate announcement. It further warned that the ongoing strike by American dockworkers strike could impact vehicle production, adding another layer of complexity to the market dynamics.

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Car seats are a crucial consideration for many parents when purchasing a vehicle, according to a new study.

More than 60 per cent of parents stated that car seat compatibility significantly influences their buying decision, according to the survey conducted by car-shopping marketplace Cars.com.

Some parents are even bringing car seats to dealerships to ensure a proper fit before committing to a purchase. Among those who took this extra step, 84 per cent reported that their questions were answered effectively, making the process smoother and providing greater peace of mind.

In its 2024 Best Cars for Car Seats Report, Cars.com evaluated 52 model-year 2023-2025 vehicles, and only six vehicles, all SUVs, were deemed worthy of top spots on this year’s list. Volkswagen models were particularly prominent, capturing half of the top positions. The top-performing models identified in the report include:

• 2024 Lexus RX 450h+
• 2024 Nissan Pathfinder
• 2024 Subaru Crosstrek
• 2024 Volkswagen Atlas Cross Sport
• 2024 Volkswagen Atlas
• 2024 Volkswagen ID.4

The report also highlights the importance of budget considerations for families. Notably, five of the six top vehicles also appeared on Cars.com’s 2024 American-Made Index, with the Volkswagen ID.4, which ranked third, standing out for its affordability. The ID.4 has recently seen a 21 per cent price drop on Cars Commerce’s New Car Price Index.

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Ford Motor Company announced significant updates to its electrification strategy, aiming to boost consumer adoption and profitability as electric vehicle sales continue to fall short of expectations.

Last month, Ford unveiled a series of strategic updates to its electrification plan, designed to speed up consumer adoption and enhance profitability — all in response to how the market has changed.

What’s happened is, that despite ongoing growth in sales, recent numbers have been underwhelming compared to expectations. That’s made Ford nervous about future growth, particularly in North America where Ford has high exposure but EV adoption rates lag behind Europe and China.

Key changes in Ford’s strategy include introducing an all-new electric commercial van set to begin production in 2026, a medium-size pickup truck based on a new affordable EV platform, and a new truck expected to launch in 2027.

Furthermore, Ford announced it cancelled plans for three-row all-electric SUVs. These will instead be replaced by a suite of three-row SUVs with various propulsion options — not just electric. The company said it will also adjust the timing of product launches and realign how it sources batteries in search of cost reductions.

These changes don’t come without costs, noted ratings agency DBRS Morningstar in an analysis of the announcement. Ford estimated that this pivot would total up to US$1.9 billion.

EV sales at the beginning were propped up by early adopters. DBRS noted that these consumers were gung-ho to embrace new vehicle propulsion technology and were more amenable to EVs’ higher pricing than internal combustion engine vehicles.

“However, with EV sales to early adopters now seemingly significantly exhausted, EVs are struggling to maintain ongoing sales momentum among mainstream consumers,” DBRS noted in its report.

It observed that prospective buyers cited concerns over the higher costs of EVs, even though several manufacturers have reduced prices. And other issues like range, charging reliability and infrastructure are improving.

DBRS also noted that Ford’s EV spending share is set to decrease.

“Ford Model e’s current operating results underscore the current challenges (not only to Ford, but also to several mainstream automotive OEMs) of the EV landscape, which are further exacerbated by uncertainties over the future sales/adoption rates of EVs,” the group noted.

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It’s been a strong run of year-over-year increases in the new vehicle sales market but one industry observer is concerned about how much longer the pace can continue as indicators point to an uncertain future.

June was the only month with a dip in the last 22 months — it’s dead even total in 2024 with 2023 being the only time there wasn’t growth.

But the bar has been fairly low to jump over — pandemic-related issues suppressed sales, so a return to normalcy in supply, demand and consumer confidence easily helped the market rebound.

While numbers rebounded above pandemic stats, they still sit below pre-pandemic data. And while August 2024 new vehicle sales were up compared to the same time last year — DesRosiers Automotive Consultants reported growth of 5.6 per cent, with an estimated 165,000 units sold — we’re still below the pre-pandemic average of over 180,000 units for August.

The seasonally adjusted annual rate (SAAR) for August 2024 reached 1.81 million units, the highest since the first quarter of 2024, when pent-up demand surged.

But will these good times last? Good times, compared to recent data, anyway. The consultancy isn’t quite sure.

Andrew King, DesRosiers’ managing partner, noted that sustaining significant percentage gains will be challenging.

“The final four months of 2023 saw improved inventory and an uptick in sales pace,” King said. “The SAAR consistently exceeded 1.8 million, setting tougher benchmarks for this fall.”

King also highlighted rising unemployment, declining GDP per capita, and high vehicle prices as factors contributing to the uncertain outlook for the coming months. Corporate performances varied widely in August, with some companies facing declines while others set new sales records.

Image credit: Depositphotos.com

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For the first time in two years, dealer inventory of new vehicles saw a decline.

Cloud Theory, a provider of real-time automotive data insights for manufacturers, agencies and affiliates, reported a decrease for August. This marks the first pullback — excluding typical seasonal declines from December to January — that the industry has seen in two years.

The report also highlights a range-bound demand picture, with diagnostic numbers indicating that turn rates have remained steady in the mid-to-high 30s for the past seven months. Average marketed pricing has held steady for three consecutive months, but market adjustments, which measure consumer-visible discounts and incentives, continue to increase.

“Our numbers have been pointing to a slowdown in supply growth, and it was inevitable that the industry would eventually reach a ceiling,” said Rick Wainschel, vice president of data science and analytics at Cloud Theory. “

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In an age dominated by digital interactions, most car buyers still find value in visiting physical showrooms, according to new research.

Despite the rise of digital customer journeys, nearly three out of four (74 per cent) car buyers still value visiting car showrooms, according to the latest research from OMODA, a brand of Chinese automaker Chery Automobiles.

The research found importance of physical showrooms in the automotive purchase process, while also highlighting how these spaces can evolve. Among the most valued showroom features are test drives, with 64 per cent of buyers still wanting a hands-on experience with the vehicle. Two in five respondents expressed interest in virtual test drives for future showrooms.

If there was a feeling that the traditional showroom would meet its demise, the research found that these locations remain a crucial part of the car buying journey.

The research also found that almost half (43 per cent) of car buyers value salespeople with in-depth knowledge. This is especially true for those looking to purchase EVs, with 24 per cent saying that speaking to a knowledgeable expert about their local charging infrastructure was vital.

When asked about their biggest dislikes in the showroom experience, 61 per cent of respondents cited pressure from sales staff, 47 per cent mentioned feeling rushed and 46 per cent were concerned about hidden costs.

As for the future showroom, beyond virtual test drives, more than half (52 per cent) of respondents wanted interactive digital displays and 48 per cent sought tech support areas. Additionally, more than one in five (22 per cent) desired AI or robot sales assistants, and 60 per cent would find in-showroom training in car technology useful.

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Ford’s exhibit at the 2024 Canadian International AutoShow

More than 14 million vehicles have been recalled so far this year and Ford topped the list for the most in the second quarter of 2024 in the U.S.

BizzyCar, a leading recall management platform for car dealerships, released its Q2 2024 recall report. It noted that, despite a slight decrease in overall recalls compared to the first quarter, the high number of recalls made this year underscore ongoing safety concerns.

The report identified Ford as the top manufacturer for Q2 recalls, with 1,380,879 vehicles affected. Following Ford, Chrysler FCA US recorded 1,261,023 vehicles under recall and Kia had 468,876 vehicles impacted.

Year-to-date figures show Ford again leading with 3,582,962 vehicles recalled, Tesla, Inc. at 2,552,178 vehicles and Chrysler with 2,224,398 vehicles.

The data highlights critical safety advisories issued by manufacturers. Kia, for instance, released a “Park Outside Advisory” for 462,869 vehicles due to fire risks, and both Kia and Mercedes-Benz have issued “Do Not Drive” advisories for severe safety defects.

Analysis by BizzyCar of the National Highway Traffic Safety Administration (NHTSA) and the U.S. Department of Transportation (USDOT) found 115 recalls affecting 4,621,994 vehicles. Notable defective components include back-over prevention issues, affecting 1.6 million vehicles, and electrical system problems impacting 814,223 vehicles, highlighting ongoing electrical safety challenges in modern vehicles.

“The number one reason consumers cited for not taking their vehicle in for potentially hazardous and even deadly recalls is a lack of convenience,” said Hunter Swift, vice president of marketing at BizzyCar, referencing a recent Bloomberg report. “This year alone, 12,837,245 vehicles have been affected by recalls that pose a crash risk or increase the risk of injury.

“As an industry, we need to rise to this challenge and offer consumers convenient ways to bring in these recalled vehicles by providing easy scheduling options, mobile service, and other methods to mitigate the convenience factor and keep them safe on the road.”

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There’s a bit of a tug-of-war game going on between manufacturer-recommended services and what the dealer tells customers. There could be conflicting information out there.

An automaker may say a maintenance procedure isn’t needed. But the supplier that makes the component in question says it indeed does? What happens here in this care? The automotive aftermarket can step in and break the deadlock.

There can be a disconnect between what the dealer tells customers and what suppliers tell the industry, explained Jeremy O’Neal of AdvisorFix and coach to technicians, service advisors and shop owners.

However, the customer is more often listening to the dealer. They don’t know what the manufacturer typically recommends. But there is one group that has access to both groups: The automotive aftermarket. And this industry plays a key role in ensuring consumers get the right information and save themselves from a potential catastrophic failure, he explained.

O’Neal used the example of a transmission manufacturer saying the fluid should be changed every 60,000 miles. But the dealer tells the customer it never needs changing.

The dealer is stripping out this cost to the customer, he told attendees of his session, The Essential Laws of The Profitable Shop Manager at the Worldpac Supplier and Training Expo in Nashville. Why? because it comes down to the costs for the consumer. If they see this $450 job that has to be done every few years, that factors into the customer’s decision to buy that vehicle.

So the onus falls on shops and their service advisors to get the right information from manufacturers. It can be as simple as visiting a tradeshow and speaking to representatives to get the full details. Then relay that story to the shop’s customers.

“You [could] explain that story: I was at a conference, I met the manufacturer of the transmission, here’s what they told me to do and here’s why,” O’Neal advised.

He then took out small bottles that showed clean transmission fluid and dirty fluid after 60,000 miles. The dirty vial was discoloured compared to the clean one and had bits of metal shavings floating around.

An example like this can quickly demonstrate why the fluid does indeed need to be changed, O’Neal explained. And it’s easy to do — get a sample from your technician the next time they work on a vehicle.

“So this is how you can start to influence customers on why they need to do maintenance,” O’Neal said.

Once the customer sees they need to do routine maintenance, he added, then you can create a customized maintenance and repair plan tailored for them.

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If the trends in built-to-order vehicles are any indication, Canadians are willing to wait for the vehicles they want.

Amid the semiconductor shortage of 2021-23, a significant trend emerged in the Canadian automotive market: build-to-order (BTO) vehicle purchases. This trend, already popularized by new entrants like Tesla, gained traction as dealer inventories dwindled.

So what’s the area like these days? DesRosiers Automotive Consultants surveyed dealers and consumers to find out.

The group found that Canadian consumers are open to waiting for their vehicles. Only 10.1 per cent of respondents are willing to wait less than a week, while 55.7 per cent are prepared to wait over a month. Notably, 22.6 per cent are willing to wait more than three months. Dealers also see a lasting role for BTO, predicting that by 2030, 45.3 per cent of vehicle sales will be build-to-order, with traditional inventory sales comprising 54.7 per cent.

This shift towards BTO reflects a significant change in consumer behavior and dealer strategy, suggesting a new era in the automotive market.

“Consumers are clearly willing to wait a reasonable amount of time to take delivery of their desired vehicle,” said Andrew King, Managing Partner at DAC. He emphasized that, given efficient supply chains and timely deliveries, extensive on-ground inventory is not essential for meeting consumer demand.

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Shown on stage for the ribbon cutting (from left to right) are: Anthony Fioritto II, Stellantis director of supply chain engineering; Troy Nibbe, Stellantis regional PDC operations director; Melody Pedersen, Unifor Local 1285 shop chair; Mike Koval Jr., Stellantis senior vice president and head of Mopar North America; Partick Brown, Mayor of Brampton and Eduardo Escobedo, Brampton PDC Plant Manager.

Stellantis North America cut the ribbon on a state-of-the-art Mopar Parts Distribution Centre (PDC) in Brampton, Ontario.

The $25.1 million investment will employ more than 170 Canadian workers.

Mike Koval Jr., senior vice president and head of Mopar North America, Brampton Mayor Patrick Brown and leaders from Unifor local 1285 attended the opening and delivered remarks before a gathering of Canadian federal and provincial government officials, Stellantis dealer representatives, and facility employees.

“The opening of our new Mopar Parts Distribution Centre in Brampton represents a significant milestone for Mopar and Stellantis,” said Koval in a statement. “We’re bringing the latest technology and innovation into our facility to support our dedicated Unifor-represented employees. This new, state-of-the-art workplace will improve efficiency for our dealers and customers while ensuring that we can quickly deliver the right part at the right time every time.”

The 513,000-square-foot facility will serve Stellantis dealerships and customers across Ontario, Quebec and Eastern Canada. It houses nearly 55,000 parts and has the capacity to ship up to two million orders annually.

Stellantis highlighted the new AutoStore automated storage and retrieval system, the first of its kind in a Stellantis facility in North America. The system features 27 robots equipped with advanced picking functions that navigate tracks above a 16-foot-tall grid stocked with parts. These robots efficiently retrieve parts from one of 43,000 bins within the 11,700-square-foot storage space and transport them to production stations where employees pack and process the final shipments. This technology significantly enhances the speed, precision, and reliability of parts procurement, ensuring on-time shipping while optimizing storage space.

Additionally, the new Brampton PDC includes a 12,000-square-foot service training centre, offering both classroom and hands-on technical instruction to ensure that employees are well-versed in the latest service techniques and technologies.

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Canadian automotive groups have launched a new campaign to highlight the urgent need to build up electric vehicle charging infrastructure in time for the 2035 deadline.

The groups say 100 chargers need to be installed every day to meet Canada’s zero-emission vehicle (ZEV) sales target 11 years from now. And so they’ve launched “Countdown to 2035,” a tracking initiative highlighting the critical need for expanded public charging infrastructure.

“As the Federal Government’s ZEV aspirations start to meet market realities around the country, the Countdown to 2035 will provide valuable information and insights as to what is required, where and at what pace,” said Tim Reuss, president and CEO of the Canadian Automobile Dealers Association (CADA) in a joint statement. “The bottom line is Canadians need federal action for better, more reliable charging infrastructure and supports for purchasing ZEVs in every segment of the market.”

Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association (CVMA), emphasized the role of consumer demand in driving ZEV adoption in the same announcement.

“Higher levels of ZEV adoption will be driven by consumer demand, not government mandates,” Kingston said. “Canadians cannot be mandated to purchase electric vehicles without first providing them with the ability to conveniently charge their vehicles no matter where they live.”

David Adams, president and CEO of the Global Automakers of Canada (GAC), highlighted the pivotal role of consumers in the transition to ZEVs.

“There are three key factors to broader ZEV adoption which are, the consumer, the consumer and the consumer,” Adams said in the statement. “Consumers will ultimately decide whether a ZEV works for their lifestyle or not …  and make no mistake, the industry needs Canadians to purchase ZEVs. Governments need to be making this choice easier for Canadians and not more difficult, such as the unilateral measures made last week by the B.C. government to severely restrict EV purchase incentives for B.C. consumers. This is counterproductive to the goal of greater EV adoption.”

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Canada’s run of 19 straight months of year-over-year increases in new vehicle sales came to an end in June. But industry observers at DesRosiers Automotive Consultants aren’t all that put off.

The 169,000 sales in June 2024 — dead even with the same time last year — probably could have come in higher if not for the devastating breach of CDK Global’s software, crippling dealerships from across North America from competing sales.

With dealers back online following the outage, interest rates cut and appearing to continue heading down and better OE incentives, there’s market momentum, DesRosiers’ analysis outlined. June’s seasonally adjusted annual rate came in at 1.72 million, a tick ahead of May, a “definitive positive,” said Andrew King, the consultancy’s managing partner.

“However, sales figures are still far below industry highs, with June sales exceeding 200,000 units in both 2018 and 2017,” he pointed out.

Year to date, the market is up 10.4 per cent compared to the first six months of 2023 with an estimated 924,000 vehicles sold. General Motors leads the market overall in volume with sales of close to 141,000 units during the first six months of the year. Volkswagen led the larger volume brands for percentage gain with sales up 54 per cent.

“Hopefully July will see a rebound from the software-related issues — with delayed sales being recovered quickly,” DesRosiers’ analysis said. “With interest rates starting a downward cycle and the inventory issues behind us, we will be watching closely to see how much momentum the market can hold on to as pent-up demand starts to wane.”

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2024 Wagoneer

Large sport utility vehicles are often seen as the embodiment of road safety due to their imposing size, but new ratings from the Insurance Institute for Highway Safety (IIHS) reveal significant differences in safety performance among popular models.

The Jeep Wagoneer emerged as the only tested SUV to earn a Top Safety Pick award, while the Chevrolet Tahoe and Ford Expedition lagged behind due to various safety shortcomings.

The Wagoneer stood out for its performance in the small overlap front crash test, which evaluates how well a vehicle protects its occupants in a collision that impacts the front corner of the vehicle. The Wagoneer maintained good survival space for both the driver and front passenger.

The Chevrolet Tahoe received an acceptable rating in the driver-side small overlap test, with sufficient survival space for the driver. However, significant footwell intrusion increased the risk of lower leg injuries.

The Ford Expedition, rated marginal, struggled in both driver- and passenger-side tests. In the driver-side test, the steering column partially detached from the instrument panel, and in both tests, the A-pillar separated from the rocker panel. Excessive footwell intrusion led to a high risk of injury to the driver’s right leg and a moderate risk to the left.

When an additional dummy was placed in the second row to evaluate updated moderate overlap ratings, none of the vehicles performed well. High seat belt forces indicated a high risk of chest injuries for rear-seat passengers in all three SUVs.

The Tahoe, rated poor, showed a high risk of head or neck injuries for rear-seat passengers, along with chest injury risks. Its second-row lap belt also slid onto the dummy’s abdomen, increasing the risk of abdominal injuries.

“These discouraging results show that some popular vehicles still lag behind in meeting the most advanced safety standards,” said Raul Arbelaez, vice president of the IIHS Vehicle Research Center. “The good news is that the top performer in this class proves that automakers can readily address these problems.”

In the updated side test, all three SUVs earned good ratings, although the Expedition’s rear dummy’s head struck the side curtain airbag hard.

For pedestrian crash avoidance, the Expedition and Wagoneer’s standard front crash prevention systems earned good ratings, successfully avoiding collisions with pedestrian dummies in most tests. The Wagoneer’s headlights also performed well, earning acceptable or good ratings. However, the Expedition’s headlights were rated marginal due to inadequate illumination and excessive glare.

The Tahoe, however, earned a marginal rating in the pedestrian test. Its standard system performed well in daylight but faltered in the dark. In specific nighttime scenarios, the Tahoe’s high beams only reduced speed by 3 mph, and its low beams failed to slow down at all, indicating poor performance.

The safety of seat belt reminders also varied among the models. The Expedition earned a good rating, the Tahoe an acceptable rating due to the lack of a reminder for the second row, and the Wagoneer a marginal rating because of a delayed unbelted occupant alert and the absence of a second-row reminder.

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Matthias Wacker is the new Porsche Cars Canada after sales head.

He joins from Porsche AG where he held various management positions in after sales and supply chain strategy for the past five years. His started with the company in 2013 in product monitoring and quality analytics at the brand’s world headquarters in Zuffenhausen, Germany.

Wacker takes over from Alexander Pretsch who has returned to Germany after spending four years with the Canadian subsidiary.

“Matthias’ impressive resume, abilities, and knowledge of the brand make him an exceptional addition to the team,” said John Cappella, President and CEO of Porsche Cars Canada. “I would also like to thank Alexander Pretsch for his dedication, leadership, and overall contribution to our success.”

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The electric Hummer on display at the 2024 Canadian International AutoShow

As the automotive industry shifts towards electric vehicles, dealers are expressing significant concerns about the transition, according to a recent report by CDK Global.

Dealers Face the EV Transition highlighted growing pessimism among dealers regarding the EV market’s impact on their business models with 65 per cent of respondents saying so. Fewer than one in five (19 per cent) were optimistic.

That said, feelings vary depending on where these dealers are located and the markets they serve, the report noted.

“Yet, the EV market is said to be inevitable even as headwinds build. Many challenger brands not named Tesla are hurting. Traditional automakers are seen scaling back or rethinking their EV strategy mid-flight,” the report said. “In this tumultuous atmosphere, dealers serve not as a canary in a coal mine but heralds of an unwelcome truth on the ground.”

Dealers are particularly worried about the high costs associated with EV infrastructure and training as well as the uncertain consumer demand. Over half of the surveyed dealers doubt their ability to achieve profitability with EVs, citing the substantial investment required for charging stations and specialized technician training.

Most (45 per cent) said the industry would be at EV parity, with at least half of all sales being all electric, in five to 15 years, but a quarter (25 per cent) said they don’t see parity taking place for “several decades at least.” The rest (30 per cent) said it would be more than 15 years.

Dealers cite similar reasons as consumers as to why there’s a lack of buy-in on EVs: 62 per cent said range doesn’t meet their needs; 47 per cent said charging is too difficult or takes too long; and 34 per cent cite the high purchase prices.

The report also noted that 60 per cent of dealers feel unprepared for the EV transition, with many fearing a loss of business if they cannot adapt quickly. Despite the industry’s push towards electrification, dealers are hesitant to fully embrace EVs without clearer pathways to financial viability and stronger consumer incentives.

As the automotive landscape evolves, dealers are calling for more support and guidance to navigate the challenges posed by the EV revolution, emphasizing the need for comprehensive strategies to ensure their continued success in a rapidly changing market.

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Car dealerships across North America are grappling with significant disruptions following cyberattacks on a major software provider, CDK Global, which serves thousands of auto dealers in the U.S. and Canada.

On June 19, CDK Global experienced two consecutive cyberattacks targeting dealer management systames, resulting in a prolonged outage that continues to affect dealership operations. This has led to delays for prospective car buyers. Orders are being processed manually, with pen and paper. Some media reports indicate that repair orders can’t be completed because it has to run through the computer system to be closed.

The company is calling the cyberattack “a ransom event” with Bloomberg reporting the attack being linked to a group called BlackSuit. Bloomberg also reported that the ransom was set at tens of millions of dollars and that CDK was planning to pay.

“When you see an attack of this kind, it almost always ends up being a ransomware attack,” Cliff Steinhauer, director of information security and engagement at the National Cybersecurity Alliance, told the Associated Press. “We see it time and time again unfortunately, [particularly in] the last couple of years. No industry and no organization or software company is immune.”

CDK anticipates the restoration process to not happen earlier than the end of June, according to a memo sent to dealers and seen by Reuters. The company has asked dealers to make alternate plans for their month-end financial closing processes.

Illinois-based CDK is in about 15,000 dealerships across Canada and the U.S., according to the company. It’s a crucial player in the auto sales industry, providing software for daily operations such as vehicle sales, financing, insurance, and repairs. According to Reuters, the cyber attack has impacted about half of Volkswagen dealers and around 60 per cent of Audi’s dealers in the U.S.

In response to the cyberattacks, the Associated Press reported that CDK shut down all its systems as a precautionary measure and has since begun the restoration process. The company has launched an investigation with third-party experts and notified law enforcement. CDK has also warned customers of potential phishing attempts by bad actors posing as CDK affiliates.

Major auto companies like Stellantis, Ford, and BMW confirmed to The Associated Press that the CDK outage has impacted some of their dealers, but sales operations continue. Stellantis noted that many dealerships have reverted to manual processes, including writing up orders by hand.

A Florida man is now suing CDK in a potential class action lawsuit, saying the company neglected to safeguard his private information and claims that his private information — including his Social Security number, financial details, credit card numbers and bank account information — was impacted in the breach. He further claims the software company should have been better prepared for the cyberattack, given the prevalence of such risks.

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New vehicle prices remained lower year-over-year for the eighth consecutive month in the U.S. as of May, as higher inventory levels continued to exert downward pressure on transaction prices.

According to Kelley Blue Book, the average transaction price (ATP) for a new vehicle in the U.S. was $48,389, a 0.9 per cent decrease, approximately $442, from May 2023.

Increased incentives played a significant role in making new vehicles more affordable, according to the group. The average incentive package, which includes discounts and rebates, rose to 6.7 per cent of the ATP, the highest level since May 2021. Incentives in May averaged around $3,200, an increase from one year ago when they were 4 per cent of ATP.

“In May, we saw some positive news on the sales front,” said Erin Keating, executive analyst for Cox Automotive. “Higher incentives and lower prices have been beneficial for consumers, especially those concerned about inflation. While many vehicles are still selling at high prices, there are excellent, affordable options, particularly in the compact segments.”

Higher inventory levels are a key factor in the current pricing trends. At the beginning of May, new vehicle inventory was to be at a 51 per cent increase year-over-year and the highest level since late 2020, according to vAuto Live Market View. Many brands had more than 100 days’ supply, with only Toyota, Lexus, and Honda having less than 60 days’ supply.

This abundance of inventory is keeping prices in check and driving higher incentives as dealers compete for customer, according to KBB.

In May, four of the top 10 best-selling vehicles were full-size pickup trucks, each with ATPs above $60,000. Despite these high-priced trucks, five of the top 10 most popular vehicles had transaction prices below $40,000, significantly below the industry average of $48,389. For instance, the Toyota RAV4, the third most popular vehicle, averaged $37,608, and the Honda CR-V, ranked fourth, averaged $37,364, nearly 23 per cent below the national average.

The share of vehicles selling for less than $40,000 increased in May compared to the previous year, suggesting a shift towards more affordable models. Vehicles priced below $40,000 accounted for 41.2 per cent of new-vehicle sales, up from 36.8 per cent in May 2023.

In the electric vehicle (EV) market, prices have seen volatility. Tesla’s average transaction price rose by 3.1 per cent month-over-month to $57,369 in May and was up 1.5 per cent year-over-year. Since January, Tesla’s ATP has increased by more than 10 per cent, partly due to growing Cybertruck sales, which averaged $108,667. Overall, EV prices increased in May, with the average EV selling for $56,648, up 2.6 per cent from April but down 4.1 per cent year-over-year.

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It seems pent-up demand for new vehicles is dissipating and new vehicle sales numbers are reaching a level of concern.

Canadian new light vehicle sales in May 2024 reached 169,000 units, according to DesRosiers Automotive Consultants. On one hand, that’s a notable improvement over the previous two years — almost 6 per cent better than 2023 and 20 per cent higher than “the pitiful” numbers of 2022 when supply shortages hurt inventories. On the other, that’s still well behind the 200,000 mark last seen in May 2019.

The seasonally adjusted annual rate (SAAR) for May 2024 was 1.63 million units, marking the lowest SAAR recorded so far this year. Despite this, the automotive market continues to show some level of growth, now marking 19 straight months of year-over-year gains.

“It is somewhat concerning (if not unexpected) that the SAAR appears to be trailing off from the levels hit in January and February when pent-up demand fuelled the market to lofty heights,” said Andrew King, managing partner at Desrosier. “However, we have now seen 19 consecutive months of year-over-year gains, and the market continues to move forward, albeit supported by an increasing range of sub-vented interest rates and other incentives.”

What may work in the industry’s favour is a reduction in interest rates. In a widely expected move, the Bank of Canada cut the number to 4.75 per cent, the first cut since March 2020. With inflation easing, more cuts can be expected. Speculation is there could be two or three more cuts by the end of the year.

However, Bank governor Tiff Macklem warned against moving the interest rate down too quickly and jeopardizing progress.

In the U.S., though, it’s a different story where the economy is said to be still too hot to move rates down. Job numbers in June came in with nearly 90,000 new jobs added than expected in May

“Inflation appears to be stuck in a range and there will need to be several consecutive months of undeniable proof that it is finally moving down at a clip, rather than a crawl, before any action is taken,” said Nigel Green, the chief executive of financial advisory firm deVere Group. “This is simply not happening at the moment and there’s no reason to suggest it will next month or the month after that.”

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The Canadian automotive market has grappled with a significant lack of new vehicle inventory since early 2021. While these shortages have largely eased and inventory levels are beginning to normalize, the full story is more nuanced.

Specifically, dealers say they have too many zero-emission vehicles and not enough internal combustion engine ones, according to a survey of Canadian Automobile Dealers Association members by DesRosiers Automotive Consultants.

When surveyed about ICE vehicle inventory, 43.1% of dealers reported insufficient inventory. Meanwhile, 32.6% indicated that they had the right amount of inventory, and 24.3% stated that they had too much ICE inventory.

In contrast, 31.4% of dealers reported sufficient ZEV inventory, but a larger group, 44.4%, felt they had too much ZEV inventory. Only 24.3% cited a lack of ZEVs.

“While dealer inventory is not the sole determinant of sales success, the opinions on ZEV and ICE stock levels are certainly revealing,” said Andrew King, Managing Partner at DesRosiers. “Consumers are increasingly resistant to higher-priced vehicles. As the market focus shifts from early adopters to a more hesitant general public, the road ahead for ZEVs will be challenging.”

Overall, dealers reported an average inventory level at 88.4% of their normal pre-pandemic baseline.

However, reaching 100% of pre-pandemic inventory levels may not be the goal going forward. Many automakers have expressed a preference for maintaining lower inventory levels compared to pre-pandemic practices. Whether they can sustain this approach as the market dynamics shift remains uncertain, DesRosiers noted.

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Customer satisfaction with dealership service experiences has shown improvement this year, despite ongoing challenges with parts and labor shortages that lead to extended waiting times for service appointments.

This finding comes from the J.D. Power 2024 U.S. Customer Service Index Study. The overall service satisfaction score increased by five points to 851 on a 1,000-point scale.

“It’s encouraging to see an improvement in service satisfaction but, unfortunately, the capacity and wait time issues have gotten progressively worse since the pandemic and show no immediate signs of easing up,” said Chris Sutton, J.D. Power’s vice president of automotive retail, noted the mixed nature of these results. While service satisfaction has seen an uplift, the issues surrounding capacity and wait times have worsened since the pandemic, with no immediate solutions in sight.

He further highlighted the subpar service experience for battery electric vehicle (BEV) owners, excluding those who own Teslas. He emphasized the urgency for automakers and dealers to address these issues as the market shifts from early adopters to more typical consumers who are less forgiving of inadequate service.

The study also points to a trust gap in dealers’ ability to conduct complex repairs for non-Tesla BEV owners, impacting the overall service experience. Trust scores among these owners lag behind those of gas-powered and plug-in hybrid vehicle owners.

The study also covers modern service features like valet service and mobile vehicle servicing. It measures customer satisfaction across five key aspects of the service experience: quality, advisor, vehicle pick-up, facility, and initiation.

Key findings from the 2024 study include:

• Appointment wait times are increasing, with mass market vehicle owners waiting an average of 5.2 days and premium vehicle owners waiting 5.4 days.
• A growing preference for prompt service is leading more customers to choose aftermarket facilities over dealerships.
• Technology plays a crucial role in improving the service experience, with a notable preference for receiving service updates via text message.
• The cost of service visits has risen significantly over the past two years, with inflation and higher parts and labor costs driving up prices.
• Non-Tesla BEV owners report the lowest satisfaction levels, particularly in relation to recall work, where they experience recalls more than twice as often as gas-powered vehicle owners.

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In what could be a sign that new vehicle sales might see their hot streak come to an end, March sales were underwhelming, according to DesRosiers Automotive Consultants.

While a 9.2 per cent year-over-year growth mark can be taken as a positive sign, it’s dwarfed by the 24.4 per cent growth seen the month before. This could be a sign that things are slowing down in the area.

“The March gain seems just a touch anticlimactic,” the consultancy wrote in its analysis.

The 159,000 units sold in March are still well below the typical 180,000-plus seen pre-pandemic in that month, which is usually when sales kick into high gear for the year.

The seasonally adjusted annual rate of 1.74 million units was “also disappointing,” the group said, noting it was the lowest seen over the past six months.

“For the time being, pent-up demand continued to carry the new light vehicle market as vehicle availability approached normalization — although there are increasing warning signs starting to appear in the market that are raising our level of concern,” said managing partner Andrew King.

In January, DesRosiers did note of signs pointing to weakness. It highlighted cracks are becoming more evident as there is “a split developing between the luxury market — which is showing distinct signs of weakness — and the mainstream market which is still surfing a wave of pent-up demand.”

First quarter numbers came in at 401,000 vehicles sold this year, up about 15 per cent from last year.

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Tugs assisting tanker approaching Baltimore’s Francis Scott Key Bridge. The bridge collapsed on March 26 after a container ship struck a support pillar. Image credit: Depositphotos.com

The collapse of the Francis Scott Key Bridge last month, and the subsequent closure of the Port of Baltimore, introduces a new challenge to the automotive supply chain, particularly affecting vehicle imports.

But ratings agency DBRS Morningstar isn’t concerned about its long-term effect on new vehicle supply, just as dealers were faring better in the area.

The bridge collapse poses a temporary hurdle for the automotive sector especially in terms of vehicle imports through the Port of Baltimore, it determined in a commentary released last week. However, the industry’s preparedness, coupled with strategic supply chain management practices developed in response to previous crises, leaved the industry positioned well to manage the current challenge effectively.

“Despite representing another strain in the automotive supply chain, given the moderate scale and limited geographic scope of the Bridge Collapse/Port closure, we expect the affected OEMs to readily absorb any resulting impact,” said Robert Streda, senior vice president of diversified industries at Morningstar DBRS.

Despite the Port of Baltimore’s significance as a major hub for passenger cars and light trucks —facilitating over 847,000 vehicle movements in 2023 — the automotive sector is anticipated to manage the disruptions smoothly. The port accounted for approximately 11 per cent of U.S. automotive imports last year, a manageable fraction in the broader context of the nation’s automotive import activities which are distributed across multiple ports, the agency said.

Rick Franza, professor in the Hull College of Business at Augusta University and an expert on operations and supply chain management, noted in a separate statement that that most foreign car manufacturers have plants in the United States. So the bridge’s collapse will likely only affect those consumers looking for a certain brand or even a specific model.

Automobile manufacturers have varied degrees of dependency on the Port of Baltimore. Companies like Volkswagen and Mercedes-Benz are among those most impacted, yet the overall effect across the industry is deemed manageable. These companies, along with others such as Toyota, Nissan, Ford, General Motors, and Stellantis, have expressed confidence in their ability to navigate the current situation without significant disruptions, DBRS reported.

The automotive industry’s resilience and adaptability have been significantly tested and proven in recent years, with experiences ranging from the COVID-19 pandemic to the global semiconductor shortage, the commentary observed.  These challenges have honed OEMs’ strategies in supply base management and supplier relations, enhancing their ability to deal with current and future supply chain disruptions.

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There has been a recovery in new vehicle sales, an important signal for the future of the automotive aftermarket. But how much longer can it last?

DesRosiers Automotive Consultants reported February 2024 new sales were the highest ever for the month. Canada has seen 16 straight months of year-over-year improvement.

The consultancy credited the movement to pent-up demand caused by consumers’ inability to replace their older vehicles, either out of desire or need. Managing partner Andrew King noted that supply constraints “are now well and truly in the rear-view mirror.”

But Todd Campau, aftermarket practice leader at S&P Global Mobility, cautioned during AAPEX 2023 that there are challenges taking place that are working against growth continuing.

One, pent up demand can’t go on forever. He sees it eventually dissipating, if it hasn’t already.

“We don’t think pent-up demand is there anymore. We believe that the economic situation that we went through over the past year has really kind of destroyed that demand rather than delayed that demand,” he said during his presentation, Trends Impacting the North American Aftermarket.

“Because what we’ve essentially seen is, we had supply constraints through much of late ’21 and ’22 when we couldn’t get microchips and all those things. That has shifted to being demand constraints — so consumers are slowing in their purchasing now. Inventories are building that dealership lots.”

Campau doesn’t think we’re going to get to a point where dealership lots become overstocked with inventory as vehicles will still sell. Just maybe not as quickly as we’re used to.

“I think they’ve learned a lot about the consumer and that may change their behaviour on the new vehicle inventory levels … but it certainly has recovered,” he added.

Some of those changed behaviours include being willing to buy a vehicle online or wait for the vehicle they want, rather than take one in the showroom.

“And so I think we’re probably about at a level of in inventory where we’re going to live going forward,” Campau said.

And prices are still high for new vehicles. DesRosiers reported third-quarter data that show the average transaction price for a light vehicle was at nearly $53,000, up almost 6 per cent from the end of 2022. It’s a similar story in the U.S. where the price of a new vehicle sits at nearly US$46,000, according to S&P Global Mobility. But prices south of the border have been flat over the last few quarters.

“The past few years, I’ve been telling you that I don’t know if [high prices are] sustainable. And I’m still not sure it’s sustainable,” Campau said.

Also factoring in is the lack of rebates being offered by manufacturers. Right now, there are about half the number of rebates or deals today compared to the past.

“OEs really seem to be showing a reluctance to put the money back on the hood that they used to put on the hood because they just don’t have to right now,” Campau said.

“And so far, consumers are continuing to buy those vehicles, which kind of surprises me at that price level.”

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March is typically the start of the traditional selling season for new vehicles in Canada. But if February was any indication, that season my have already begun.

Last month was “easily the strongest February of all time,” according to DesRosiers Automotive Consultants. The company is estimating “an astounding” 129,000 units sold, a 24 per cent increase over February 2023.

The consultancy pinned the results on “the deep well of pent-up demand from the ‘lost sales’ of the past four years.” Managing partner Andrew King further added that the results show that “some of the hurdles of recent years — and specifically the supply constraints of new vehicles — are now well and truly in the rear-view mirror.”

The seasonally adjusted annual rate for the month hit 2.11 million units, a number not seen since January 2018.

The market has now seen 16 straight months of year-over-year growth.

“This is even more remarkable given that Canada has been in the midst of a per capita recession throughout the past year,” DesRosiers noted. “March brings the start of the traditional spring selling season, which should hopefully provide an indication as to how long pent-up demand can remain as the dominant market dynamic, in the face of increased vehicle prices and high interest rates.”

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The federal government’s mandate to ban the sale of internal combustion engine vehicles in the light vehicle segment has many automotive professionals questioning the validity of the goal.

There are about 350,000 battery electric vehicles on Canadian roads right now, observed Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association.

He called that a good start while speaking at the Canadian Black Book Talk Auto 2023 event. But to get from about 10 per cent of sales to 100 per cent is going to take a lot of work.

“It can happen but a lot of things have to happen immediately and we need to see a lot more urgency from governments to make that target achievable,” he said during his presentation, State of the Canadian Auto Industry.

One is better purchase incentives. There’s still too much of a price gap between the same ICE and BEV models.

“Canadians are facing serious affordability challenges right now due to higher interest rates and a range of other challenges,” Kingston said. “You’re not going to shift a large portion of Canadians into an electric at a higher price point on the basis and the promise that they’ll save more money on gas.”

Canada has a $5,000 federal incentive. The U.S. offers about CAD$10,000. “Plus, of course, you have state-level incentives, and we have some of those at the provincial level in Canada, but it’s simply not enough,” he noted.

Second is better charging infrastructure. Even though about 1.4 per cent of vehicles in operation are electrified, there are many complaints about public chargers.

“We constantly hear stories from drivers about challenges that they have: Access to convenient public fast, reliable charging infrastructure. So that that barrier has to be removed,” Kingston said.

Education is an important component of the transition.

“We still get questions about electric vehicles and battery degradation, range, cold weather operation,” Kingston said. “There’s still a lot of questions that people have legitimate questions. So there’s more to be done on education to explain the technology and help many people made the switch.”

Creating a strong battery supply chain is the last major component of the transition. It will need to supply a lot of vehicles in a short amount of time.

“So is 100 per cent [electrification] achievable? It is but all of those things need to come together in a very, very short period of time,” Kingston said.

He wants to see a properly laid out plan as to how full electrification will be achieved.

“It feels like the targets are being set in a bit of a vacuum: Let’s just set the target is ambitious, it looks great. And then we’ll figure out how to get there later. Well, that doesn’t work for us,” Kingston said. “If you’re going to set a target, we need to understand how you’re actually going to achieve it first, and then determine whether or not it’s feasible.”

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At the 2024 Canadian International AutoShow, we put key questions to several OE leaders.

In this episode of Auto Service World Conversations, we highlight their plans for consumer education on electric vehicles, what they see as the gaps and how they’re working to help bring customers along and prepare them for the transition to electrification.

In this episode, you’ll hear from Holly Broome, national marketing manager of Chevrolet cars and crossovers, Brad Horn, product communications manager at Stellantis Canada, Matt Girgis, managing director of Volvo Car Canada and Alexa Desjardins, vehicle line manager for BEV and commercial vehicles, at Ford Motor Company of Canada.

They all agreed that a large knowledge gap exists for electric vehicles in Canada. They’re working on bridging that gap and making the transition smoother. Click the banner above to hear what they have to say or choose your platform of choice below to hear this episode and find the full Auto Service World Conversations library:

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The automotive industry is at the cusp of a technological revolution, a recent industry analysis warned.

James Edmondson, research director at consulting firm IDTechEx, wrote in a recent paper that the auto sector is witnessing unprecedented changes with the advent of electrification, autonomous driving and the emergence of software-defined vehicles. It raises the question of the role technology firms might play in this new era.

According to the IDTechEx report Electric Vehicles: Land, Sea, and Air 2024-2044 electric vehicles (EVs), including hybrids, are fast becoming the norm. The report estimated that more than 23 per cent of new cars registered in 2023 were electric, with pure battery-electric vehicles seeing a nearly five-fold increase from 2020 to 2023.

Furthermore, autonomous driving features are becoming more prevalent, with Level 2 autonomous vehicles now standard and Level 3 vehicles hitting the roads. The shift towards software-defined vehicles, capable of receiving over-the-air updates and offering new feature subscriptions, is opening up fresh revenue streams for automotive manufacturers. IDTechEx forecasted that software-related revenues to exceed US$700 billion by 2034.

The automotive industry has traditionally been slow to adapt, bound by lengthy development cycles and heavy reliance on tier 1 and 2 suppliers, Edmondson observed. But this is changing rapidly. Tesla has disrupted the market by mass-producing electric cars and redefining car buying and ownership, allowing customers to purchase vehicles online and initiate servicing remotely.

“This is in stark contrast to the historic model, where everything is carried out at the car dealership, including updating navigation maps for a hefty fee,” Edmonson noted.

These innovative approaches are spreading throughout the industry, providing technology companies with greater opportunities to make their mark. In late 2023, Hyundai and Amazon formed a strategic partnership to sell cars on Amazon.com. In 2022, Sony teamed up with Honda to bring Sony’s expertise in AI, entertainment and augmented reality to the automotive world.

“But as the automotive industry electrifies, and the combustion engine is no longer the defining feature, is it possible that this trend could go beyond tech companies providing the infotainment for an automotive OEM and start producing vehicles themselves?” Edmonson asked.

Merging the automotive and technology sectors poses unique challenges, he observed, especially for smaller startups that have struggled to scale up production while maintaining quality. However, well-financed tech giants are poised to overcome these obstacles.

Huawei is collaborating with Chinese automotive OEMs to develop car technology and produce electric vehicle drive units. Electronics giant Foxconn, known for manufacturing Apple’s iPhones, has ventured into electric car production with ambitions to capture 5 per cent of the global EV market. At the end of 2023, Xiaomi, a leading smartphone maker, unveiled its first electric car, aiming to become a top global automaker. Rumours suggest that other tech companies may soon follow suit.

The intersection of automotive and technology sectors prompts a pivotal question for Edmondson: Is it harder for traditional automakers to develop the necessary technology for future consumers or for tech companies to acquire the manufacturing expertise needed for the automotive mass market?

“The reality will likely lie somewhere between, where partnerships are sure to be a mainstay in the short term, but developments, acquisitions, and some displacement in the long term,” he wrote. “One thing is certain: The automotive market has a huge evolution ahead of it in the coming years, with many significant challenges.”

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Volkswagen has reached a settlement deal in Canada to resolve allegations of issues with primary engine coolant pumps in certain 2008-2021 Volkswagen and Audi vehicles.

The Saskatchewan Court approved a nationwide settlement to resolve claims related to allegations that the primary engine water pump in certain Volkswagen and Audi vehicles is defective.

The automaker denied any wrongdoing or liability but chose to settle to ensure customer satisfaction and confidence in its vehicles, according to Merchant Law Group.

While the settlement was approved in December 2023, claims submissions opened up in February.

Details about the class actions, proposed settlement, and available benefits can be found at canadianwaterpumpsettlement.ca  or by contacting the settlement administrator at 1-866-642-0774.

Deadline to submit a claim is June 3, 2024.

The summary of the class action noted that “An eligible claimant who requires a repair or replacement under the extended warranty provided in the settlement can bring their eligible vehicle to an authorized Volkswagen or Audi Dealership, depending on their eligible vehicle.”

Certain current and former owners and lessees of Volkswagen and Audi vehicles will be offered reimbursement for past repairs and an extended warranty.

Claimants will be required to include documents showing proof of ownership, proof of repair expense and proof they adhered to the vehicle maintenance schedule.

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Another automaker has adopted the same electric vehicle standard on which Tesla’s vehicles work.

Mazda announced an agreement with Tesla to adopt the North American Charging Standard (NACS) for charging ports on the company’s battery electric vehicles launched in North America starting in 2025.

In the summer, Ford announced it had reached the same deal with Tesla. General Motors soon followed suit.

Mazda said that it will drive adoption of NACS to provide customers with a broader range of charging options.

By partnering with Tesla, these automakers will have access to more than 15,000 Tesla Superchargers across North America. Mazda did not say if it, as Ford is doing, will provide current BEV owners an adapter to connect its vehicles to the NACS system.

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Part of the Stellantis booth at the 2023 Canadian International AutoShow

The parent company of Chrysler, Dodge, Jeep and Ram won’t be participating in any North American auto shows this year.

Setllantis, which also owns the Fiat and Alfa Romeo, told Automotive News Canada that slow sales amid the challenging market have forced it to reconsider its marketing strategy,

There will be a presence from the brands at the Canadian International AutoShow in Toronto next month, but the displays will be funded by local dealerships.

Last year’s booth featured a test track for its Jeep vehicles. It is expected to return. The 2023 Toronto show saw its third-largest attendance numbers ever. Organizers of the Vancouver International Auto Show announced its event would return in March of this year.

Stellantis skipped last year’s Los Angeles Auto Show and the SEMA Show where its Mopar division typically has a large display.

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After a disappointing end to 2022, Canadian new vehicle sales in 2023 saw a solid rebound.

DesRosiers Automotive Consultants reported sales of 1,664,000 units last year, a 12 per cent increase from the fewer than 1.5 million in 2022.

The increase was thanks to improved vehicle supply, particularly in the second half of the year. December was a strong month with about 120,000 vehicles sold, 1n 11 per cent increase from the same time in 2022.

That now puts year-over-year growth at 14 straight months with sales up in all provinces, as supply and demand match up. DesRosiers noted that 2023’s fourth quarter “was remarkably robust.” It reported a 17 per cent sales increase and a seasonally adjusted annual rate of near or above 1.8 million units.

DesRosiers credited pent-up demand from the lost sales years between 2020 and 2022. High interest rates and concerns over economic weakness didn’t seem to deter many buyers.

DesRosiers has predicted that while such economic trepidation and concerns for personal finance would usually deter buyers, 2023 would not see buyers shy away from dealerships over these concerns. That turned out to be an accurate forecast.

“Of the many remarkable aspects of 2023’s performance, one of the most notable was the continued gain in light truck share,” observed Andrew King, the firm’s managing partner. “For 2023, light trucks continued to push out an ever-shrinking pool of passenger cars, with trucks reaching a record share of 85.8 per cent for the year, as Canadian consumers enjoyed the freedom to choose the vehicles they want to purchase.”

General Motors led in total sales with 263,084 units for the year, up 15 per cent from 2022. Mitsubishi saw the biggest sales increase, up 62 per cent compared to the previous year.

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The streak of higher new vehicle sales continued last month — and at a higher pace than we’ve seen all year.

DesRosiers Automotive Consultants reported sales of more than 138,000 units in November, up 21 per cent from the same time in 2022. That marks the 13th straight month of year-over-year increases and the largest percentage gain seen this year.

“Improving vehicle availability and strong pent-up demand from a million units of ‘lost sales’ continued to overcome high interest rates and worrying recent economic downdrafts,” observed Andrew Kind, the consultancy’s managing partner.

That said, the high gains come compared to a low bar. Monthly sales in November 2023 were behind the pace of November 2019 when more than 143,000 new vehicles were sold.

However, the seasonally adjusted annual rate for the month came in at 1.82 million. A positive sign as that’s the highest number seen since March 2021.

This year has already surpassed last year’s total of 1.49 million units sold with one month to go.

“While 2023 is by no means going to be a record-setting year for the Canadian automotive market, it does represent an important step in recovery,” DesRosiers’ announcement said.

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Customers are having an improved experience when going through the vehicle buying process.

The J.D. Power 2023 U.S. Sales Satisfaction Index (SSI) Study reported growing new-vehicle inventory on dealers’ lots combined with moderating prices have propelled customer satisfaction upward trajectory this year.

In 2023, overall customer satisfaction with the vehicle purchase experience increased to 793 (on a 1,000-point scale) from 786 one year ago.

The study also found that satisfaction among owners of internal combustion engine vehicles continues to be higher than among electric vehicle owners in both the premium and mass market segments.

Overall satisfaction among owners of mass-market ICE vehicles is 848, compared to the 790 satisfaction score among mass-market EV owners. Satisfaction among premium EV owners is 831, while it’s 866 among premium ICE vehicle owners.

“The improved level of vehicle inventory and the easing of upward pressure on prices are the driving factors in sending sales satisfaction back in a positive direction,” said Chris Sutton, vice president of automotive retail at J.D. Power. “Vehicle buyers are more satisfied with the inventory choices they now see in dealerships across the country—more than in the past three years. Increased inventory also means fewer buyers are paying more than the manufacturer’s suggested retail price (MSRP) for their new vehicle.”

More than one-third (34 per cent) of EV buyers say dealers are not doing enough to make them feel comfortable with EV maintenance requirements and 11 per cent aren’t comfortable with the EV charging process and options.

“Buyers of ICE vehicles don’t need to be taught how to put fuel in the gas tank,” Sutton said. “But salespeople need to show EV buyers how to charge their vehicles at home and what’s involved in using a public charging station.”

Higher inventory means dealers can’t charge higher than MSRP, meaning few customers are paying above the line. Dealer profits may take a hit but customer satisfaction benefits, J.D. Power noted. It found that 15 per cent of mass market buyers paid above MSRP, a decrease from 25 per cent in 2022.

“Buyers who paid more than MSRP are much less satisfied with the sales process than those who paid MSRP or less,” J.D. Power said.

That said, customers aren’t that satisfied with how much they’re paying. This year, buyers of mass market vehicles provide a rating of 8.04 (on a 10-point scale) for fairness of price paid vs. 8.14 in 2020.

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Prices paid for new vehicles in Canada have continued to jump so far in 2023.

Data from DesRosiers Automotive Consultants show that the average transaction price for a new light truck or passenger car is $52,900 — up nearly 6 per cent from the end of 2022 when the average transaction price was $49,9000.

Driving that jump is the increase to light trucks at an estimated transaction price of $54,000 on average by the end of the third quarter this year. Passenger cars came in at $46,000. Both are up from $51,700 and $41,800, respectively, at the end of 2022.

Because light trucks make up about 86 per cent of vehicle sales, the overall average transaction price skews higher.

These figures once again represent the highest transaction prices ever in Canada.

“New light vehicle transactions have been getting more expensive as a result of semi-conductor shortages, the growing share of EVs, a shift to light trucks, and broader inflationary pressures,” said Andrew King, managing partner at DesRosiers.

He added that there has been a $10,000 jump — almost 20 per cent — in the average transaction price for light vehicles over the last four years.

Guido Vildozo, a senior manager who forecasts light vehicle sales in the Americas, noted at Canadian Black Book’s Talk Auto event earlier this month that even while dealer inventories are increasing, customers typically only have higher-end, more expensive options from which to choose. He called it the “wrong” type of inventory that won’t help people who want to buy a new vehicle as they can’t afford these elevated prices. And that’s on top of economic pressures.

And prices could go higher. Ford said its new deal with the United Auto Workers union could raise costs USD$8.8 billion, which works out to about $900 per vehicle, by 2028.

“While even greater increases in used vehicle prices have helped many consumers with the equity of their trade-in, the increase in new vehicle prices combined with high interest rates is obviously creating a challenging market environment that we will be watching closely in 2024,” DesRosiers’ announcement about the stats said.

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Economic concerns and high costs are pushing some automakers to take their feet off the pedal when it comes to electric vehicles.

Two domestic OEs — Ford and General Motors — along with Tesla are slowing down their electric ambitions. With interest rates high, pushing already expensive vehicles to a higher price range when tied to financing, and consumers worried about the economy as inflation sits higher than they’d like and everything in general costing more, tens of billions of dollars of stated investment appears as though it’ll be held back.

The news comes as Canada saw its highest battery electric vehicle registration stats ever. S&P Global Mobility reported that one-in-10 new vehicle registrations in the third quarter were BEV. Zero-emission vehicles (BEVs and plug-in hybrids) accounted for 13 per cent altogether.

Still, GM has ditched its goal of building 400,000 EVs by next summer. It’s also delaying the release of some new models.

Ford is pushing back its plan to spend $12 billion on EV factories. They reported that customers are showing reluctance to pay extra for such vehicles.

Tesla slashed prices this year and still saw sales fall. Now the company may delay building a $1 billion plant in Mexico.

That said, automakers said they’re still committed to electrification. But with so many competitors — from legacy OEs to new ones — competition has forced prices to stay relatively low. Profits are not there yet for many companies and demand isn’t enough to offset low margins.

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It’s now been 12 straight months of year-over-year growth for new vehicle sales in Canada.

According to DesRosiers Automotive Consultants, the last time that proclamation could be made was in November 2015, which then saw 32 straight months of year-over-year increases.

October sales came in at just under 146,000 units, up 20 per cent from 2022.

“The market has been on a tear the last 3 months with gains close to 20 per cent each month,” said Andrew King, the consultancy’s managing partner. “Clearly pent-up demand and improved vehicle availability are overcoming the headwinds caused by high interest rates and stagnant GDP performance.”

The seasonally adjusted annual rate for the month came in at 1.79 million – the strongest seen since January.

Of course, it must be noted that the comparable is weak as October 2022 was the worst October since 2008, of the recession-era. Furthermore, October 2019 saw sales of close to 160,000 units, showing there is still much room to grow.

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The Ford Mustang GT has seen the biggest price jump over the last decade, whether or not you account for inflation.

In 2013, the Mustang could be had for just over $31,000, according to analysis from Rerev, which provides automotive guides and repair insights. If held steady, that number would be at just under $41,000 when accounting for inflation. However, that vehicle is now $58,000 at the dealer, an inflation-adjusted increase of 41.5 per cent.

Second on the list is the BMW M5, with price jumping to $108,895 from $60,100 in 2023. “This price increase is partially due to the redesign and enhanced tech features,” the announcement said.

On the flip side, the Toyota Corolla actually went down in price when accounting for inflation. It’s selling price today is about $21,700 — it’s inflation-adjusted 2013 price would be more than $23,500.

“This makes it 7.79 per cent more affordable today,” Rerev stated. “Having the same upgrades as Camry, Toyota uses the same strategy for Corolla models as well to have a more competitive price.”

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If true, experts believe Toyota’s claim of a battery with massive range and quick charge could alter the path of electric vehicles.

The Japanese automaker — which has dragged its feet in electrifying its vehicle fleet — said it believes it has simplified production and developed ways to make batteries more durable. That could allow the company to make a solid-state battery with a range of 1,200 km (745 miles) that could charge in 10 minutes or less. It would be simpler to manufacture than a conventional lithium-ion battery.

However, skeptics are wary. CleanTechnica, a cleantech news and analysis outlet, noted that details are lacking. People are looking for information on the number of charging cycles possible, how the batteries perform in cold temperatures and more.

“As it turns out, the latest news from Toyota is a lot of huffing and puffing without much substance to it,” said author Steve Hanley, adding that the announcement should be taken with a grain of salt due to the lack of details.

It also has industry expert James Carter cautious about what may lay ahead. As a former Toyota employee, he noted that Toyota at one time was well-trusted for its announcements. But with its hesitation towards EVs, push on hydrogen and pushback on proposals to reduce emissions, things are different now.

“Unfortunately, this loss of confidence means it’s hard to consider Toyota’s battery announcements as much more worthy than a well-funded startup,” Carter said in a LinkedIn post. “I’ll believe it when it’s in a production car with customers putting miles on it.”

However, battery technology is improving. Much money is being put to developing better EV batteries.

“I don’t at all doubt that we’ll get to the levels Toyota is talking about, but when that is, and who’ll do it first with high cycle life is still very much an open question,” Carter said.

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September proved to be a hot month for new vehicle sales, continuing a streak of year-over-year improvement.

DesRosiers Automotive Consultants reported that Canadian new sales numbers came in at 155,249 units, a 19 per cent jump from the same time in 2022.

The performance exceeded August’s numbers, which were up 18.3 per cent in 2023 over 2022.

Of course, the hype has to be taken with a grain of salt — September 2022’s numbers were so bad that it wouldn’t have been difficult to jump higher this year. In fact, last September was the worst since 2009 during the Great Recession.

But helping the progression was increased availability at dealers, noted Andrew King, DesRosiers’ managing partner.

“Improved vehicle availability is making a real impact on the market, allowing pent-up demand to be released and easily outweighing any down-drafts from high interest rates and a weak economic environment,” he said.

On top of that, the seasonally adjusted annual rate for September was 1.77 million units, the highest since January and a further positive sign of what’s ahead. Last year, sales finished below 1.5 million.

Year-to-date, DesRosiers noted, the market is up 10.1 per cent overall.

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More than 600,000 Hyundai and Kia vehicles are being recalled in Canada due to a problem with the anti-lock braking system that can start a fire.

More than three million are being recalled in the U.S. for the same issue. All vehicle owners are being advised to park their vehicles outside.

Documents posted by the U.S. National Highway Traffic Safety Administration said the anti-lock brake control module can leak fluid and cause an electrical short. That can touch off a fire while the vehicles are parked or being driven.

Vehicles range from 2010-23 Hyundai Tuscons to 2012-2015 Hyundai Accents to 2010-2013 Kia Fortes to 2011-2013 Souls.

Hyundai said it’s aware of 21 fires linked to the fault in the United States, plus 22 “thermal incidents,” including visible smoke, burning and melting. The company told CBC News in a statement that there are “no crashes, injuries, or fatalities attributable to this condition.”

Of Hyundai’s 326,942 vehicles being recalled in Canada, they include:

• 77,571 model year 2012-2015 Hyundai Accent vehicles
• 153,026 model year 2011-2015 Hyundai Elantra vehicles;
• 4,403 model year 2013-2015 Hyundai Elantra Coupe vehicles;
• 85 model year 2014-2015 Hyundai Equus vehicles;
• 7,789 model year 2011-2015 Hyundai Genesis Coupe vehicles;
• 8,507 model year 2013-2015 Hyundai Santa Fe vehicles;
• 24,795 model year 2013 Hyundai Santa Fe Sport vehicles;
• 46,318 model year 2010-2013 Hyundai Tucson vehicles;
• 4,448 model year 2010-2012 Hyundai Veracruz vehicles.

Kia Canada says 276,225 vehicles here are impacted, including:

• 2010-2011 Borregos;
• 2015-2016 Cadenzas;
• 2010-2013 Fortes;
• 2010-2013 Forte Koups;
• 2015 K900s;
• 2010-2015 Optimas;
• 2012-2017 Rios;
• 2010-2017 Rondos,
• 2011-2014 Sorrentos;
• 2011-2013 Souls;
• 2010 Sportages;

Dealers will replace the anti-lock brake fuse at no cost to owners, whi will be notified by mail in November.

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New vehicle prices were mostly flat overall year-over-year as increases and cuts balanced each other out.

Kelley Blue Book noted that the average transaction price for a new vehicle in August was up only $42 compared to the same time last year to $48,451.

The group credited higher inventory levels and increased incentives holding year-over-year price gains in check.

Luxury vehicle prices dropped 3.3 per cent thanks to big cuts made by Tesla. The EV automaker dropped prices upwards of 20 per cent from $65,688 to $53,376 on average.

Incentives for EVs in August made up 8.1 per cent of average transaction prices.

“After a tumultuous last few years in the automotive marketplace, now we are seeing new-vehicle pricing trends hold steady,” said Rebecca Rydzewski, research manager at Cox Automotive. “Dealers and automakers are feeling price pressure, and with high auto loan rates and growing inventory levels, new-vehicle prices seem to have hit a ceiling, at least for now.”

The Q3 2023 Cox Automotive Dealers Sentiment Index, franchised automobile dealers have declining expectations for EV sales in the coming months.

“Dealers are realizing this is not going to be an easy road in the short term, especially for some brands. However, the pressure dealers feel is from over-supply rather than a lack of demand. I see this as a natural speed bump and an expected part of growth,” said Cox Automotive chief economist Jonathan Smoke. “The No. 1 issue for consumers is price, and that’s a barrier even to considering an electric vehicle. As an economist, I can confidently predict that surplus inventory and increased competition will eventually drive down prices, which will help with EV consideration and adoption.”

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New vehicles are critical to the automotive aftermarket, including ensuring a steady future supply of sweet spot vehicles, so there is natural concern when there are fewer new cars being sold year after year.

This has been the case in recent years since the COVID-19 pandemic took hold. In the years leading up to 2020, Canada had at least 1.8 million new unit sales from 2014 to 2019, including cracking two million in 2017.

In 2022, total sales didn’t even break 1.5 million.

It’s been a similar story south of the border. After hitting 17 million new cars sold in 2019, sales tumbled to 13.9 million in 2022.

New vehicles have five impacts on the aftermarket, according to Lang Marketing.

First, new vehicles impact the average age of all vehicles in operation. And how many newer vehicles there are “determines the population of the critical repair-age sweet-spot (vehicles aged six to 10 years old), which brackets cars and light trucks with the highest rates of annual usage across many aftermarket products,” it said in a recent Aftermarket iReport.

Furthermore, new vehicles are a key market for many types of accessories — new vehicles are often modified to fit lifestyles and usage needs of the owner.

But the fact that many vehicle owners purchased accessories during the pandemic to outfit their current vehicles has buoyed the industry, Lang noted.

Two other impacts are that vehicles five years and newer are traditionally the primary source of business in dealer service bays and that new vehicles average the highest annual mileage — meaning that older vehicles are now getting more mileage as they’re not being traded in or sold so consumers can buy new models.

So with a smaller pool from which to draw customers as the new to five age group has significantly shrunk, dealers are refocusing. They’re looking at older cars, those that the aftermarket could consider to be in their sweet spot, Lang reported.

As for more mileage on older vehicles, Lang saw this as creating more demand for aftermarket product.

“Since older vehicles use more aftermarket products per mile than newer ones, this mileage shift leads to more wear and tear on the aftermarket parts of older vehicles. It increases aftermarket product use,” it said.

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It’s been 10 straight months of new vehicle sales increases in Canada. Though the bar is low because of weak sales in 2022, DesRosiers Automotive Consultants is touting the news as continued positivity for the industry.

The group noted that it expected auto sales to increase despite weakening economic news — pent-up demand is overcoming high interest rates and stagnant, or even declining, economic numbers.

August new sales numbers came in at just under 150,000, up 18 per cent from the same time last year, though that was the worst August performance since 1999.

“Fueled by improved vehicle availability and pent-up demand from the 1.1 million ‘lost sales’ that never happened in 2020-2022, the market in August performed strongly, making it now 10 months in a row that we have seen year-over-year market growth,” said the company’s managing partner Andrew King.

These new numbers put the sales pace at 1.65 million units. Last year ended with fewer than 1.5 million units sold. DesRosiers sees the numbers as “a positive sign of market resilience to date. It will be interesting to see if market momentum can be sustained in the coming months in light of high interest rates, weakening economic performance, and record high new vehicle prices.”

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From Ford’s patent filing, the backup battery pack would sit on the roof of the vehicle

A backup battery pack on an electric vehicle’s roof? That could be the case soon after Ford applied for a patent for such a contraption.

According to the patent, the pack looks like something you would see being carried on the roof rack of a vehicle.

The move comes as range anxiety and concerns around charging infrastructure scare off consumers, particularly those in Canada.

The proposed backup battery pack would sit on the car’s roof. It would give drivers extra battery power if or when needed. Ideally, this would reduce concerns about range and provide drivers with extra power so they can make it to the nearest charging station.

The pack doesn’t need to be permanent. The patent suggests that the roof-resting addition could be “rented or leased prior to an off-roading trip.” Apart from being removable, the battery packs would also be compatible with multiple EV models.

Of course, this raises questions about weight. Battery packs already add about 1,000 pounds, if not more, to vehicles. So how much would this backup weigh and how would the driver install the pack on their roof?

Car and Driver speculated that Ford may go opt for a smaller capacity battery pack. It noted that “the original Prius plug-in hybrid’s 4.4-kWh battery hit the scales at a manufacturer-claimed 176 pounds.”

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More than 20,000 Nissan Sentras in Canada are being recalled for the same issue they faced in 2021.

The issue centres around front steering tie-rods can warp and break, leading to loss of steering control for certain 2020-2022 models.

Nissan said that if the tie-rod ends bend, they can be damaged and deform. If this happens, the tire rods may break, impacting the steering and increasing the risk of a collision.

The same problem forced recalls in 2021 — those vehicles repaired then will have to be repaired again.

Owners are being urged to contact their dealer if they notice their steering wheel isn’t centred or if they feel a vibration. Technicians will inspect and replace any broken or deformed parts and tire rod ends, both left and right, will be replaced when a new part is available at no cost to vehicle owners.

Letters informing owners about the issue will be sent out starting Oct. 5. A second letter will be sent when new parts are available.

The issue also affects 236,000 Sentras in the U.S.

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Months after scrapping its most popular and affordable electric vehicle, General Motors announced that it is bringing back the Chevrolet Bolt.

During a quarterly earnings call, GM head Mary Barra said her company is responding to demand.

“We can’t build enough Bolts right now,” the chief executive said.

The vehicle is responsible for converting many into GM buyers — the company said about 70 per cent of buyers who trade in a vehicle for a Bolt are trading in a non-GM vehicle.

The revived Bolt will include GM’s latest Ultium battery technology. A new Ultium plant in Ohio is a joint venture between the automaker and LG Energy Solutions out of South Korea.

But there have been difficulties in that technology, according to the company. It said there have been “unexpected delays” in producing Ultium battery modules due to delivery issues from a supplier of automated manufacturing equipment.

Production of Ultium battery cells is “ahead of schedule,” but there have been delays in assembling those cells into clusters known as modules, GM said.

Barra observed that the company built 50,000 EVs in North America in the first half of 2023 — about 80 per cent being the Bolt EV and the slightly larger Bolt EUV that use an older, non-Ultium battery.

The company is planning to build about 100,000 EVs in the second half. Electrified models of the Blazer, Equinox and Silverado are being added to GM’s EV lineup.

When the new Bolt will be released hasn’t been announced but GM said it will introduce it on an “accelerated timeline.”

The Bolt was first introduced in 2017.

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2023 Mazda MX-30 EV (CNW Group/Mazda Canada Inc.)

The Mazda MX-30 electric vehicle has been killed off in U.S., but will live on, for now, in Canada.

No new models will be available in the U.S. after the 2023 model but Canadians can expect to see 2024 options in showrooms.

The MX-30 is Mazda’s only battery electric offering at the moment. The company will be redirecting resources to hybrids and plug-in hybrids, which it offers in other models, following the MX-30’s exit.

The MX-30 didn’t carry much in terms of range, only offering a max of 161 km on a single charge with a price tag of more than $42,000 in Canada. By comparison, the Hyundai Kona EV for the same price gives you a top out of 415 km in range.

And, of course, range would be further diminished in this part of the world as opposed to the U.S. where part of the country doesn’t see the same type of cold weather northern Canada would.

“In Canada, we can confirm the MX-30 will be on sale for the 2024 model year,” said Mazda Canada’s public relations manager Chuck Reimer. “More details on this model will be shared at a later date closer to on sale timing this winter.”

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A problem sourcing used vehicles and historically high pricing continues to be the name of the game in the used vehicle sector.

Analysis from both DesRosier Automotive Consultants and Canadian Black Book show a reduction in pricing at this point in 2023 compared to the same time last year — though not by very much.

Year-over-year, Canadian Black Book’s Used Vehicle Retention Index for July 2023 showed a 1.4 per cent decrease following a 0.3 per cent month-over-month decrease from June.

“Canadian wholesale price remain high as we pass the mid-point of summer,” said David Robins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book. “Trucks and SUV’s continue to decrease at an above average rate as consumers look to lower-cost vehicles.”

In its poll of Used Car Dealers Association members, DesRosiers found sales results are on pace with last year for independent dealers with 67 units on average sold — that’s equal to the average amount sold during the same period last year.

“The latter parts of 2022 and the first half of 2023 saw some moderation in used vehicle prices as improved new vehicle supply began to partially alleviate some pressure from used vehicle demand,” said DesRosiers managing partner Andrew King in a press release.

But new vehicle dealers’ used departments are tracking a bit higher with an average of 155 sales, up from 148 a year ago. The boost is coming from trade-ins as new vehicle sales increase.

This is of benefit to the aftermarket.

“Now, there could be a counterintuitive shift: Surging new-vehicle supply could further boost expansion of the used-vehicle fleet, bringing more high-mileage vehicles into service bays,” S&P Global Mobility recently observed.

That said, DesRosiers pegged full-year sales expectations at 305 units for franchised new dealers and 140 for independents, which is lower than forecasted at the start of the year.

Trouble sourcing vehicles hit independent members harder with 51 per cent saying these challenges have gotten worse — just 12 per cent saw improvement. They’ve been using auctions for the most part to source vehicles, compared to dealers who’ve been buoyed by trade-ins.

This raises the concern that if dealers are the leading source for used vehicles, will they try to keep those vehicles in their service bays? Even though dealers have traditionally focused on the new-to-five segment, a decline in new vehicles has pushed them to focus more on older vehicles — those that would traditionally be considered in the aftermarket sweet spot. They may not even be discriminating against other brands either, Lang Marketing reported. They’re taking an ‘all years, all nameplates’ approach.

“To promote their service bays to used-vehicle buyers, many dealers are expanding their use of aftermarket brands, which generally have lower prices than OE parts, and are providing special promotions for frequently performed repairs,” Lang said.

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After Ford and General Motors came to an agreement with Tesla to use its Supercharger network, major automakers are uniting to develop their own network.

Seven major automakers said they’re joining forces to build a North American electric vehicle charging network which would nearly double the number of fast-charging plugs in the U.S. and Canada.

General Motors, BMW, Honda, Hyundai, Kia, Mercedes and Stellantis announced they will share in a multibillion-dollar investment to build “high power” charging stations. The initiative would create 30,000 plugs in urban areas and along travel corridors.

The network would be public and open to all electric vehicle owners. It would have connections available for both Tesla’s North American Charging Standard plugs as well as the Combined Charging System plugs used by other automakers.

With consumer concerns around range anxiety and charging infrastructure, this move may help alleviate concerns. However, the companies didn’t disclose how many charging stations would be built or the financial details of the joint venture. The first of the chargers will be ready next summer in the U.S. but didn’t note how long it would take to build out the full network.

There are about 8,700 direct-current fast-charging stations in the U.S. and Canada and nearly 36,000 charging plugs, according to the U.S. Department of Energy, the Associated Press reported.

Tesla’s network has the largest number of fast chargers in North America with 2,050 stations and more than 22,000 plugs in the U.S. and Canada.

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For the first time, there is a consecutive year-over-year decline in new vehicle owner satisfaction.

The J.D. Power U.S. Automotive Performance, Execution and Layout (APEAL) Study average score came in at 845 points on a 1,000-point scale. That’s a drop of two points from last year and three points from the year before.

“The decline in consecutive years might look small, but it’s an indicator that larger issues may lie under the surface,” said Frank Hanley, senior director of auto benchmarking at J.D. Power. “Despite the technology and design innovations that manufacturers put into new vehicles, owners are lukewarm about them. While innovations like charging pads, vehicle apps and advanced audio features should enhance an owner’s experience, this is not the case when problems are experienced. This downward trajectory of satisfaction should be a warning sign to manufacturers that they need to better understand what owners really want in their new vehicles.”

Ten factors make up the study. Nine saw a year-over-year decline with the only improvement coming in fuel economy — its score of 771 is a 15-point improvement.

The biggest decline is exterior, dropping to 888 from 894. Satisfaction with exterior styling on new models in 2023 is particularly unremarkable, scoring only three points above carryover models.

J.D. Power noted that “built-in infotainment systems are a prime example of a technology not resonating with today’s buyers.”

It reported that only 56 per cent of owners prefer to use their vehicle’s built-in system to play audio, which is down from 70% in 2020.

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While there was an uproar over the fact that some in-car features would cost extra through a subscription fee, a recent study found that consumers are satisfied with what they pay for and are willing to continue subscribing.

After purchasing a car, automakers like General Motors and BMW are charging customers for in-car features, such as heated seats.

“Consumers are welcoming to the idea of subscriptions because it gives them exposure to features or technology that they may not have had in the past,” said Yanina Mills, senior technical research analyst at S&P Global Mobility.

Almost 8,000 consumers were surveyed. Out of a subset of about 4,500 who had experienced a free trial or an existing subscription on a model year 2016 vehicle or newer, 82 per cent said they would at least probably consider purchasing subscription-based services on a future new vehicle purchase.

S&P reported that in-vehicle exposure to the features is better than education to grow demand and foster satisfaction and retention. It noted that 45% of respondents had the service activated at the dealership, typically as part of a free trial period.

That improves the odds of growing subscribers. “It’s all a matter of exposure,” Mills said.

Once exposed, consumers are happy with their connected services subscriptions. The vast majority of previous-subscriber respondents said they were likely to renew, according to S&P.

Satisfaction ranked highly with 85% of respondents saying they would recommend the service to a friend. Among individual brands, Audi Connect and BMW ConnectedDrive consistently perform well, scoring high in most global markets for the third survey year in a row.

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A screen grab of an IIHS crash test with a Nissan Frontier

A safety report is raising concerns over the safety of rear passengers in small pickup trucks.

Most small pickup trucks fall short, the Insurance Institute for Highway Safety said after reviewing its latest crash test ratings.

“Our updated moderate overlap front crash test proved to be challenging for small pickups,” said IIHS president David Harkey.

He went on to explain that there was common issue among these pickups — the head of the rear passenger dummy comes “dangerously close to the front seatback, and in many cases, dummy measurements indicated a risk of neck or chest injuries. All these things tell us that the rear seat belts need improvement.”

Five small crew cab pickups were rated — none received a “good.” The Nissan Frontier was rated acceptable while the Ford Ranger was given a marginal rating. The Chevrolet Colorado, Jeep Gladiator and Toyota Tacoma all rated poor.

To get a “good” rating, there can’t be an excessive risk of injury to the head, neck, chest or thigh recorded by the second-row dummy. In these tests, the dummy was the size of a small woman or 12-year-old child. The dummy should remain positioned correctly during the crash without sliding forward beneath the lap belt (or “submarining”). IIHS noted that the head should also remain a safe distance from the front seatback and the rest of the vehicle interior. A pressure sensor on the rear dummy’s torso is used to check whether the shoulder belt is too high, which can make the restraint system less effective.

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How you look at July’s new vehicle sales will depend on how you see the glass.

The half-full optimist may be encouraged that sales are up from the same time last year and continues to build on gains seen for almost a year. The glass-half-empty pessimist may see the regression from previous months as a red flag, while further noting how far behind sales remain from pre-pandemic levels.

DesRosiers Automotive Consultants estimated Canadian sales for July at fewer than 141,000 units. That’s up 8 per cent from last July but down compared to May and June’s increases of 13.5 per cent and 12.6 per cent, respectively.

Still, July’s numbers mean we’ve seen nine straight months of year-over-year increases. However, the sales pace for the year now sits at 1.55 million units, below June’s pace but ahead of May. Last year finished with fewer than 1.5 million units sold.

“There is still significant ground to cover in order to return to pre-pandemic levels,” DesRosiers’ analysis said. “July new light vehicle sales in 2019 reached 173,519 units sold, meaning July 2023 remains 18.8 per cent behind. However, the market continues to show consistent promise, even outside of the spring selling season.”

U.S. sales

New vehicle sales in the U.S. are also on an upward trajectory. Light vehicle sales volume in July 2023 is expected to reach about 1.3 million units, both S&P Global Mobility and J.D. Power estimate. That’s up about 18 per cent year over year, with slight variations depending on the consultancy.

“From both an economic growth and auto demand perspective, the first half of 2023 has proven once again that one shouldn’t doubt the spending capacity of U.S. consumers,” said Chris Hopson, principal analyst at S&P Global Mobility.

At this rate, around 16 million units would be sold in the U.S. this year. However, S&P is expecting 15.4 million vehicles sold this year. That’s up from its original forecast of 15.1 million.

The final result, S&P noted, will depend on a number of issues, including vehicle affordability — not just car prices, but increased interest rates and credit tightening. But, inventory could bounce back quicker than expected which could alleviate some pricing pressures in the new vehicle market.

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Foreign brands are increasing their dominance on American roads, according to a recent report.

Lang Marketing reported that domestic nameplates on U.S. roads dropped by nearly eight million over a 10-year span between 2012 and 2022.

This comes as total vehicles in operation have grown over the same time period.

The share of domestic nameplate cars led to the drop off. The number of vehicles in operation for domestic cars dropped from 23 per cent in 2012 to 13 per cent in 2022. Even though the number of domestic light trucks grew, it wasn’t enough to offset an overall drop.

Overall, domestics held a little more than 50 per cent market share in 2022, but that’s down from 60 per cent in 2012.

On the flip side, foreign nameplates surged over the last 10 years. More than 40 million were added between 2012 and 2022. With a 25 per cent increase over that span, it brought it market share to just about even with domestics.

“The historic VIO shift from domestic to foreign nameplates created major consequences for light vehicle aftermarket product volume,” said the Aftermarket iReport from Lang.

Repair specialists and foreign specialists are market leaders in sales growth, it noted.

“These outlet groups have a preponderance of their business generated by foreign nameplates, and, accordingly, their combined growth greatly outpaced the overall DIFM market between 2012 and 2022,” Lang said.

It also observed that “foreign nameplates will lead the way and generate virtually all aftermarket product volume growth during 2023 and 2024.”

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Intent to buy a new vehicle among Canadian consumers is up and by not being shy about returning to dealerships for a new set of wheels, the average price continues to go up.

AutoTrader reported a new car in Canada was priced at $66,288 in June. That’s up 2.2 per cent from May and 21.3 per cent from the same time last year.

“With more new vehicles reaching dealer lots and robust consumer demand, vehicle prices are responding to market dynamics, resulting in year-over-year price increases for both new and used vehicles,” the June 2023 Price Index report said.

It also noted a light increase in used prices, which are now being tagged on average at $39,645, up 0.3 per cent from May and up 4.1 per cent from June 2022.

Used prices are stabilizing as new car sales increase. “Along with the improvement in new car availability, however, there has been a positive development in used inventory levels contributing to the stabilization of used vehicle prices in recent months,” AutoTrader explained.

More people are willing to trade in their older vehicles as well as return their leased ones, adding to used inventory.

Recently, DesRosiers noted the average transaction price of new vehicles is just under $50,000.

Still, overall availability of new vehicles remains inconsistent across the country and well below pre-pandemic levels. Sales have been keeping up with inventory, indicating demand is still strong.

“If demand continues to exceed supply, we anticipate that new vehicle prices will not experience significant fluctuations,” the report said. “Used vehicle prices are hovering just below the $40K mark since the beginning of the year. Although used inventory levels have improved in the past couple months, given the robust demand, it might take a while to see a meaningful softening in used prices.”

Consumers out west are looking at the highest prices for new vehicles, taking up the top three spots. Alberta leads the country at $69,764 (up 18 per cent from June 2022). British Columbia is second at $67,827 (up 19 per cent) followed by Manitoba and Saskatchewan at $66,503 (up 17 per cent). Ontario’s average price is $64,807 (up 22 per cent).

While Quebec is the second-cheapest province for new vehicles ($64, 215), prices are up 27 per cent from one year ago.

Atlantic Canada has the cheapest priced vehicles at $59,419.

The Ford F-150 was the top-searched vehicle. Its average new price is $78,928 with a used average of $45,873.

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New data from the Canadian Automobile Dealers Association shed light on how dealer service and parts departments are performing.

The first of its kind, the Data Report for 2022 also included a look at the landscape of dealers, from financial trends to the types of vehicles consumers are buying.

It reported that the average dealership has $8.9 million in parts and service sales. Looking at the biggest categories, about $2.95 million were customer repairs, and about $1.4 million was warranty work. There was about $2.7 million classified as “other.”

Canadian dealerships have an average of 41 employees and 27 of them are technicians, including body repair.

Last year, the average dealer had 8,328 repair tickets. Total service and parts sales per customer repair order was, on average, $436. For warranty repairs, that number was $427.

While many aftermarket shops still aim for a 50-50 parts-to-labour ratio split, dealers in Canada are reporting a 0.79.

The report also included a look at dealers’ shop productivity last year. Each stall reported 79.7 per cent productivity, up from 74.3 the year before,

Technician efficiency also went up, increasing to 116.9 per cent in 2023 from 113.9 per cent in 2022.

Looking at salaries, data was listed from 2021. The average service manager made $109,809 while the top 10 per cent made $156,103 on average.

A parts manager made $89,883 on average across the country with the top 10 per cent making an average of $130,408.

The average service technician made $78,485 with the top 10 per cent making an average of $114,785.

A service advisor/writer at a dealer in Canada made $68,477 on average, with the top 10 per cent making an average of $99,137.

The national average salary for a parts consultant was $54,503. The top 10 per cent made an average of $73,867.

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The large sport utility vehicle segment has seen the biggest growth among vehicle segments in 2023 while the subcompact cars have seen the most significant drop off.

DesRosiers Automotive Consultants reported new light vehicle sales among reporting manufacturers have been increasing for eight straight months and first-half sales have increased an estimated 7.6 per cent compared to last year.

With a 37.3 per cent growth rate, the large SUV segment is by far the fastest-growing segment for consumers. It’s followed by a pair of luxury segment vehicles with sports cars (29 per cent) and cars (27 per cent) coming in second and third.

On the decline, subcompact cars dropped the fastest with 27.4 per cent fewer vehicles sold. Luxury high cars fell 19.5 per cent while small pickups dropped 19.3 per cent.

“While inventory shortages have undoubtedly distorted the market recently, consumer choice remains a powerful force and Canadian consumers are continuing their love affair with SUVs,” said Andrew King, managing partner at the consultancy.

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The auto market is experiencing a rise in consumer spending, but is this good for the industry?

DesRosiers Automotive Consultants recently reported that automotive parts, accessories and tire stores showed 10.2 per cent growth. The increase in aftermarket growth comes even after elevated sales a year ago when factors like inflation and supply issues raised prices.

New car dealers reported a 9.3 per cent increase, thanks to recovering inventory numbers. Meanwhile, used dealers saw a 2.5 per cent decline, likely due to consumers opting for new options as availability improved.

While sales are increasing, so are prices, leaving many consumers unable to afford a new vehicle. The Canadian average transaction price in 2022 was just under $50,000.

With these trends, there are pros and cons to the rising tide of car sales in the new and used markets.

The auto industry has had a tough few years. Challenges continue as manufacturers grapple with ongoing supply chain shortages.

Increased auto spending in 2023

The auto industry has had a tough few years. Challenges continue as manufacturers grapple with ongoing supply chain shortages. The impact of these shortfalls affects the whole market, including consumers. In 2021 and into 2022, supply issues meant fewer new cars were available. However, availability is beginning to recover in 2023.

As a result, the auto market is seeing increases in consumer spending. Canadian auto dealers sold 20,000 more new cars in Q1 2023 compared to Q1 2022. Consumers spent $3.9 million more on new vehicles in Q1 2023 than in the previous year, as well.

More vehicles are being sold this year at higher prices than before. Some consumers are getting priced out of the new vehicle market, but demand remains strong. In fact, used cars are also seeing increased prices and demand, likely reflecting some consumers shifting to more affordable options.

One factor that may be helping the rising new car prices is production choices from automakers. Supply shortages mean manufacturers must be more selective about which vehicles they invest in most. In this situation, lower-priced models are often cut from the lineup or made in smaller quantities. Higher-priced offerings are more profitable, driving companies to produce more cars.

“They’ve certainly been picking the vehicles to build based on the chips they have available, as well as the demand they’re seeing,” said Todd Campau, automotive aftermarket practice lead at S&P Global Mobility, at AAPEX 2022. “They’ve been preferentially building high-margin vehicles — more trucks and things like that where they make more money.

Even if supply chain issues persist, the auto market can still see increased sales because the average car price is higher today.

A lack of affordable cars

While increased consumer spending may benefit retailers, it has some drawbacks. Key among those is the need for affordable cars on the market. Higher prices for new vehicles are pushing more consumers to buy used, allowing dealers to sell them at higher prices.

An uptick in used car prices may mean people who need a car don’t have access to an affordable one. This means more consumers may need to apply for loans or financing to get a vehicle, which can be risky for shoppers and dealers. One of the most important principles of effective collections is avoiding high-risk transactions when possible, which includes customers with poor credit.

In the past, customers in this position may have been able to afford inexpensive used vehicles, allowing them to get something without a big financial risk for the dealer. That isn’t always the case today, though. Even used cars are priced higher than many low-income consumers can afford.

Used car dealers have commented on the situation, noting that cars in the $3,000-$5,000 price range are unavailable. Many also can’t afford the financial risk of offering financing to customers without a strong credit history. That means less revenue for these dealers, who are also struggling to get a large supply of used vehicles on their lots.

While auto spending is up from previous years, it is important to note that it is not necessarily a universal win for the market. People spending more money on new vehicles than they can afford translates to more debt for consumers and more risk for dealers.

These trends are concerning, but it’s worth remembering the supply chain issues facing auto manufacturers are also hitting aftermarket manufacturers.

Repairs and the automotive aftermarket

The cost of car repairs is on the rise, along with the wait times, thanks to the low availability of replacement parts, even for popular models. Plus, higher car prices may motivate consumers to hang on to older models, which typically have higher maintenance needs. This is particularly true for people who usually shop in the used car market.

These trends are concerning, but it’s worth remembering the supply chain issues facing auto manufacturers are also hitting aftermarket manufacturers. As the world’s leading auto brands recover from supply chain shortages, the aftermarket will also likely bounce back.

While suppliers are closer to their normal, distributors are still navigating their way through what their new one is.

“In our case as the distributor, what that means is we are compensating for all of the volatility that’s in our supply chain,” said Mauro Cifelli, president and CEO of Groupe Del Vasto, at AIA Canada’s National Conference. “Inventories are sky high, our carrying costs are up and we’re trying to manage labour, we’re investing in technology and innovation to try to keep up with it with some of the volatility in the supply chain.”

Something the aftermarket will need to keep an eye on is the pace of new vehicle sales. Business has been great, as DesRosiers has pointed out. Aftermarket parts usually allow consumers to save money on vehicle maintenance. Higher prices and unavailable components in the aftermarket may make it more difficult for many consumers to afford the upkeep of their vehicle.

Will business subside to pre-pandemic levels as new vehicle inventories recover and consumers opt to replace rather than repair? This will be a trend to watch.

Will business subside to pre-pandemic levels as new vehicle inventories recover and consumers opt to replace rather than repair? This will be a trend to watch.

The future of the auto industry

What do these trends mean for the future of the auto industry? New vehicle prices are expected to remain high, while the cost of used cars will continue climbing through 2023 and into 2024. Trucks and SUVs are the most popular models on the market —and the most expensive options, so price increases will likely affect them most.

One interesting factor that could shake up the auto market is EVs. In 2022, Canada experienced the highest number of new zero-emission vehicle registrations on record, accounting for 18 per cent of new registrations nationwide. Consumers now have a wider variety of vehicles to choose from, leading many to switch to electrics and hybrids.

An uptick in consumer interest in EVs could cause noticeable disruption for dealers selling exclusively traditional ICE vehicles. With more affordable EVs coming to market, used car dealers could even experience some of the shift in demand.

EV charging infrastructure in Canada is still a major concern in 2023, but numerous efforts may change that. For example, the U.S. and Canadian governments recently announced a collaborative international EV charging network that will span 1,400 km with a charging station every 80 km.

Devin Partida is the Editor-in-Chief of ReHack.com and a freelance writer. Devin covers business technology, Fintech and auto tech

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The Bank of Canada being one of the quickest in the world to move on tightening monetary policy has paid off, according to an automotive industry expert.

As a result, inflation has fallen. It had been in an elevated space for an extended period of time but has come off the heights it once was, noted Guido Vildozo, senior manager of Americas light vehicles sales forecasting at S&P Global Mobility.

In May, Statistics Canada reported that inflation had cooled to 3.4 per cent, which is under the OECD average of 6.5 per cent and the G7 average of 4.3 per cent.

On July 12, the Bank of Canada raised its key interest rate to 5 per cent as “excess demand and elevated core inflation are both proving more persistent.” It further noted that it expects inflation won’t come down to its target of 2 per cent until the middle of 2025.

When inflation cools and interest rates come down are essential for new car sales — when both happen could push numbers to a pre-pandemic pace.

“This is very important for new car sales, because of the fact that we’re heavily dependent upon credit,” Vildozo said of lower interest rates at AIA Canada’s National Conference recently.

S&P figures vehicle sales will hit 1.7 million this year based on first-quarter numbers. DesRosiers’ numbers from June put that figure at about 1.64 million units. New car sales in May and June have been well ahead of last year’s numbers, signalling that consumers are choosing to buy new as inventory replenishes and despite higher interest rates.

Vildozo noted that semi-conductor availability will likely limit Canada to about 140,000 unit sales per month (Canada sold about 160,000 units in each of May and June, DesRosiers reported). If that stands, that means Canada can at most sell fewer than 1.7 million units.

In the years leading to the pandemic, the market in Canada sold upwards of 2 million units. But with headwinds like component shortages, higher inflation and higher interest rates, Canada will be challenged.

“This is great news if you’re in the aftermarket businesses because it means a lot of people are going to be holding on to their vehicles for much longer. So enjoy it and make sure you jack up your prices now,” he said during the session Canadian outlook and driving to an electric vehicle future.

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After a relatively strong showing in May, new vehicle sales in June kept the momentum going.

Estimates from DesRosiers Automotive Consultants show 161,901 units sold in June – up 12.6 per cent from the same month last year.

“The strong June means that we have now had eight consecutive months of year-over-year sales gains, with double-digit percentage increases in the last two months.” He continued

Furthermore, the seasonally adjusted annual rate is now at 1.64 million, the highest since February and ahead of last year which finished at under 1.5 million units.

Year to date, an estimated 813,000 units have been sold, up 7.6 percent from 756,000 units sold in the first half of 2022.

Before getting too excited, DesRosiers noted that sales in the first half of 2018 were 1.04 million units, indicating that things are not quite back to what was seen in the good old days.

General Motors led the way in the first half with 127,561 units sold, up 15.7 per cent from last year.

In the U.S., June’s total new light-vehicle sales were up 19.9 per cent year over year. The seasonally adjusted annual rate (SAAR), came in at 15.7 million, an increase of 20.2 per cent from last year’s 13 million and up 4.0 per cent from May’s 15.1 million pace.

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If you have customers who bought or leased a new vehicle between the late 1990s and the middle of the last decade, they could claim compensation through a series of class action lawsuits that will see pay outs following an alleged automotive parts price-fixing scheme.

Court approval was given for $78 million from 23 class actions, said a joint statement from a number of law firms across the country.

The class actions are part of 45 brought forward in Canada alleging unlawful conspiracies to fix auto parts prices for installation in new vehicles. Twelve automakers, plus subsidiaries, were named but the settled defendants did not admit to any wrongdoing or liability. The automakers are not alleged to have done any wrongdoing — the class actions were brought against parts manufacturers that allegedly price-fixed products.

The announcement from Siskinds in London and Toronto, Camp Fiorante Matthews Mogerman (CFM) in Vancouver and Siskinds Desmeules in Quebec City noted criminal investigations around the world, adding that the auto parts cases are the largest antitrust investigations in history when looking at the number of affected parts, implicated parties and imposed fines.

“Price-fixing conspiracies are prohibited by the Competition Act. They are harmful to the Canadian marketplace, causing businesses and consumers to pay too much for goods and services,” said David Jones, a partner at CFM in Vancouver.  “The settlements seek to redress that harm.”

Courts in Ontario, British Columbia and Quebec approved the settlements and fund distribution protocols.

Those who bought or leased new vehicles from the following manufacturers between July 1, 1998, and September 30, 2016, are eligible to receive compensation:

• Aston Martin
• BMW/ Mini Cooper
• Chrysler/ Dodge/ Fiat/ Jeep/ Ram
• Ford/ Lincoln/ Mercury
• General Motors (Buick/ Cadillac/ Chevrolet/ Daewoo/ GMC/ Hummer/ Isuzu/ Oldsmobile/ Pontiac/ Saab/ Saturn)
• Honda/ Acura
• Jaguar/ Land Rover
• Mazda
• Nissan/ Infiniti
• Subaru
• Toyota/ Lexus
• Volkswagen/ Audi/ Porsche, and Volvo

“The auto parts class actions are a large undertaking and we are proud to have recovered a significant amount of money for Canadian consumers and businesses,” said Karim Diallo, counsel at Siskinds Desmeules

Applications for settlement benefits can be filed online at www.autopartsettlement.ca  on or before October 30, 2023.

“We encourage Canadian businesses and consumers who purchased the affected vehicles to apply for settlement benefits,” said Linda Visser, Siskinds partner in London. “We designed a claims process that is straightforward and easy to use – particularly for consumers.”

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Inflation and other economic factors are influencing the attitudes and actions of car buyers in Canada, according to a survey from Canadian Black Book.

Furthermore, higher prices have pushed shoppers to look at more options when buying a vehicle.

DesRosiers recently reported that the average transaction price is nearly $50,000 for a light vehicle.

From the Canadian Black Book survey, it found that purchase price is the most important consideration when buying a vehicle for 44 per cent of Canadians, according to the survey, which was carried out by Ipsos. It was far and away the leading reason — 12 per cent said brand preference was most important.

A little more than a quarter (28 per cent) of Canadians are looking to buy a new car in the next 12 months — and 47 per cent are unlikely. Four in 10 respondents said the cost of a new vehicle is too high.

About three in five (59 per cent) reported that increased prices will delay their vehicle purchase. Of those, nearly half (44 per cent) said they’ll delay at least a year, while 28% say 2 years. Families with kids are by far the group most likely to delay a car purchase, where 72% of those respondents indicated that they would.

Younger generations are most likely to buy a new vehicle, according to the survey. Two in five of those aged 18-34 intend to compared to 19 per cent of those 55 years and older.

The survey found that 40 per cent of Canadians intend to buy used cars due to price hikes and almost half (47 per cent) of the youngest car buyers are likely to buy used — this is a growing trend as 38 per cent were likely to in 2022.

Canadian Black Book noted that average vehicle price is up about 20 per cent. Even though only 15 per cent of Canadians knew that stat, they were aware of the rising costs associated with vehicles — a third (34 per cent) said they believed prices have jumped from 15-25 per cent. Still, 12 per cent of respondents said that they believed prices have not increased at all.

“Inflation has not left the auto industry alone as prices have seen unprecedented increases in the last year, and consumers are taking note,” says Daniel Ross, senior manager of industry insights and residual value strategy at Canadian Black Book.

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Let’s start with the good: New vehicle sales in May far out-paced the last few years and signal a positive move forward for the rest of the year.

Now the bad: Sales are still far, far behind pre-pandemic numbers.

May has generally been the strongest month for new sales. DesRosiers Automotive Consultants reported an estimated sales total of nearly 160,000 units for the month. That’s up 13.5 per cent from May 2022 and 11 per cent higher than April 2023.

That brings the seasonally adjusted annual rate to 1.54 million units, “thankfully breaking a run of three months of consecutive declines and definitely a positive sign of improved vehicle availability across a broader array of manufacturers,” observed Andrew King, managing partner of DesRosiers.

The consultancy further pointed out that despite the positive sign May gave, there’s still a tough hill to climb. May 2023’s numbers are 21 per cent behind 2019’s sales of more than 202,000 units.

“However, with most economic variables continuing to be surprisingly robust and the predicted recession not yet in sight, there is some optimism that the market can build upon this base for a stronger summer of sales,” DesRosiers’ analysis said.

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Despite supply chain issue easing, new vehicle dealers are still far off from their typical levels, according to DesRosiers Automotive Consultants. And how severe the problem is depends on where you are in the country.

Shortages of new vehicles stemming from semiconductor issues continue to plague dealers — to the tune of inventory levels still being at 42 per cent of the normal in the first quarter of this year. That, however, is up from less than 20 per cent of normal levels from last year.

DesRosiers asked Canadian Automotive Dealers Association members about their situation. It found the level of recovery hasn’t been spread evenly.

On one end, Ontario is at 67 per cent of normal levels. On the other, Manitoba and Saskatchewan are at 30 per cent.

The consultancy noted that “the recovery in new vehicle supply remains uneven and unequal across the automotive market at the model, brand, and regional level.”

Half of dealers said things have improved over the last year. About a third (35 per cent) said things are the same. About 15 per cent said their situation has gotten worse.

When asked when they expect their situation to improve, most (49 per cent) said it’ll be next year. Meanwhile, 37 per cent think the second half of this year will be the start of improvements. The remaining 14 per cent were most optimistic, expecting a positive change in this year’s first half.

“New vehicle inventory challenges continue, and the improvements seen in recent months have not been shared evenly by all,” said Andrew King, managing partner at DesRosiers. “Inventory levels are expected to continue to improve throughout the year, just in time for the forecast economic recession on the horizon.”

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Canadians in the market for a new vehicle are going to fork over more dough than ever.

The average light truck transaction price was $51,700 in 2022, according to data from DesRosiers Automotive Consultants. That’s a jump of $5,000 — a nearly 10 per cent jump. It’s also the first time that light trucks surpassed the $50,000 price point.

Consumers can save $10,000 if they opt for a passenger vehicle, which came in at $41,800 on average. This segment also saw an increase compared to the year before but not as drastic, DesRosiers noted.

Light trucks accounted for 84 per cent of light vehicle sales in 2022. That brings the average transaction price to $49,900.

“The cost of purchasing a new vehicle increased sharply in 2022 driven primarily by semiconductor-related vehicle shortages,” said Andrew King, managing partner at DesRosiers. “With interest rates also climbing, affordability may create a noticeable headwind in the market, damping down the considerable pent-up demand that still exists.”

This remains good news for the automotive aftermarket — as new vehicles increase in cost, the argument to repair rather than replace grows stronger.

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After four straight years of cancellations, organizers say the Vancouver International Auto Show is set to return in 2024.

Last held in 2019, the show is the top-attended auto show in Western Canada and the group is describing the return as “a fresh and re-imagined experience.”

The 2024 show will include luxury supercars, exotics, high-powered classics and more, an announcement said. Attendees will also get to see a lineup of electric vehicles, along with lifestyle and commercial vendors on hand representing automotive culture.

“Following a four-year hiatus, we have taken a step back, building on 100 years of experience, re-imagining an event that will result in a very unique and exciting experience for both our manufacturer
partners and our consumer guests,” says Blair Qualey, President, and CEO of the New Car Dealers Association of BC, which also owns the show. “I believe the that we have found the right mix of
elements that will appeal to traditional showgoers and those looking to experience the latest technology in a whole new way.”

The show is set for March 20-24, 2024 at the Vancouver Convention Centre.

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It was a day chock full of expertise, insights, tips and knowledge at the Automotive Industries Association of Canada’s National Conference.

Held in Toronto near the airport, speakers in the main hall or in breakout sessions gave the latest information on industry trends, career tips, technological innovations and more.

The day kicked off with AIA Canada’s leadership team of president J.F. Champagne, and senior directors Alana Baker (government relations) Stuart Klein (collision) and Brendan Mullen (digital marketing and communications) providing updates on the association’s goals, the industry’s challenges and what’s ahead.

Concurrent sessions were held under three umbrella themes. Under Women in the Aftermarket, Christine Botham, assistant vice president of automotive operations at Canadian Tire talked about how relationship building drives results. Then Emily Chung, owner of the shop AutoNiche in Markham Ont., talked about the barriers and challenges women face in a male-dominated industry.

The Young Professionals in the Aftermarket hosted sessions looking at increasing your brand and presence on LinkedIn, hosted by Jacki Lutz, senior manager of global marketing communications at Sensata Technologies, while Sabrina Thring, senior vice president of revenue operations in paint and collision, Driven Brands, talked about building winning teams around you.

 

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Under the “Market research and data” theme, Guido Vildozo, senior manager of Americas light vehicles sales forecasting at S&P Global Mobility, gave a global and then Canadian-specific outlook while exploring the impact of battery electric vehicles as the country moves towards an electrified future. He was followed by J.D. Ney, Canadian automotive practice lead at J.D. Power, who talked about how consumer behaviours have changed and the need for the industry to shift along with them.

Back in the main hall, an industry leaders panel with Mauro Cifelli, president and CEO of Groupe Del Vasto, Jasna Smiljcic, senior director and country leader with Gates Canada and Steve Leal, president and CEO of Fix Network World was moderated by Champagne. They discussed supply challenges, adapting to change, training, talent and more.

Mathew Growden, head of auto retail team at Google Canada looked at vehicle buying trends and customer pain points.

The day wrapped up with Andrew Au, a global thought leader on digital transformation and culture change, who challenged attendees to embrace change, understand what lies ahead and evolve.

A pair of big awards were handed out. Brad Shaddick was presented the Distinguished Service Award, AIA Canada’s highest honour. Brad Cochrane was named the Young Leader of the Year by the Young Professionals in the Aftermarket.

The night before, an evening networking reception was held. Please see our photo gallery below and Instagram reel for more highlights.

AIA Canada National Conference 2023

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While still down compared to a year ago, Canadian Black Book’s Used Vehicle Retention Index shows a slight increase in March compared to February.

Though it’s an increase of just 0.1 points, so it’s fair to call the change flat. Now sitting at 158 points, the index is down 4.2 per cent year-over-year, Canadian Black Book reported.

“The Canadian wholesale market continues to show overall stability as the economy continues to show strength and the U.S. wholesale market heats up.” Said David Robins, principal automotive analyst and head of Canadian vehicle valuations at Canadian Black Book.

In the U.S., however, volatility appears to be the name of the game. The Manheim Used Vehicle Value Index (MUVVI) jumped 8.6 per cent in the first quarter, ending March at 238.1 points. Its index has gone up four straight months after going through the largest decline within one year in the series’ history in 2022.

Still, like Canada, wholesale used prices are down in March 2023 compared to the same period last year.

“Based on full-month data and other key metrics, we definitely think conditions are weakening. March came in like a lion and went out like a lamb regarding wholesale vehicle values. After four months of seasonally adjusted gains and 11 straight weeks of price increases, March was a turning point. So, April will likely continue the downward trend we saw as March ended, and we expect to see some negative monthly moves ahead for the index,” said Cox Automotive chief economist Jonathan Smoke.

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Like the month before, March sales were up compared to the previous year — but it’s not like there was a high bar to jump over.

DesRosiers Automotive Consultants noted the positive in its report: The market was up in March 2023 compared to 2022 with an estimated 146,000 units sold. But it was a modest 3.7 per cent increase over “what was a fairly dismal month last year,” it said.

The seasonally adjusted annual rate for the month came in at 1.59 million, which is noticeably lower than what January and February posted at about 1.7 million.

“The market has now put together five back-to-back months of gains, but there is a decided lack of momentum, and the gain in March was less than we saw in January and February,” said DesRosiers managing partner Andrew King.

Looking at quarterly data, sales are estimated to be 348,000 units from reporting companies, which is an increase of 5.2 per cent from last year.

The post How March sales went for new vehicles appeared first on Auto Service World.

A screen grab of an IIHS video of EV crash tests

After several dozen crash tests, experts from the Insurance Institute of Highway Safety aren’t so concerned about fires resulting from an electric vehicle’s battery. Instead, it’s the weight of the battery and its impact on safety.

When crash testing an EV, the IIHS takes a series of precautions, including having the local fire department on-site to deal with the difficulties of putting out a fire caused by an EV battery.

“My biggest concern is how heavy they are and what all that extra vehicle weight means for the safety of people on the road, specifically occupants of lighter vehicles as well as pedestrians and bicyclists,” observed Raul Arbelaez, vice president of Vehicle Research Center at IIHS, in a recent posting.

Today’s electric vehicles can weigh in at more than 6,000 lbs, especially as more SUVs and pickup trucks enter the market. The GMC Hummer EV is about 9,500 lbs.

Arbelaez noted that the next generation of EVs is designed to perform well in tests as its occupants are likely to be well protected in a collision.“In fact, their extra weight will afford them greater protection in a multivehicle crash,” he noted.

But that’s only part of the equation.

“Unfortunately, given the way these vehicles are currently designed, this increased protection comes at the expense of people in other vehicles,” Arbelaez added.

Granted, the weight difference between a vehicle and a pedestrian is to great that the added heft of an EV wouldn’t make much of a difference.

“However, it’s not clear that all EVs have braking performance that matches their additional mass. If the extra weight leads to longer stopping distances, that will likely lead to an increase in pedestrian and cyclist deaths, which already have been on the rise in recent years,” Arbelaez pointed out.

EVs come with acceleration unmatched by internal combustion engine vehicles. So that could lead to more collisions between EV vehicles as hard acceleration is already a cause of collisions between traditional vehicles.

And if an EV and an ICE vehicle collide, the weight disparity comes into play.

“We don’t need to put the brakes on electrification — there are good reasons for it — and we’re not doomed to reverse all the safety gains of recent decades,” Arbelaez said. “But the development will require some new thinking about the kinds of vehicles we want on our roads.”

Ideally, battery technology development will allow for smaller batteries carrying the same charge and range to be put in vehicles.

“In the meantime, we need to double down on existing solutions. Manufacturers should equip all new vehicles with high-performing crash avoidance systems that recognize and brake for pedestrians and bicyclists, in addition to other vehicles, and good headlights that allow drivers to react quickly at night,” Arbelaez said. “States and local governments should consider lowering speed limits, factoring in the increased danger from weight disparities, and backing them up with increased enforcement.”

The post Biggest EV crash concern? It’s not a fire appeared first on Auto Service World.

From left: Oliver Blume, CEO Volkswagen Group; Thomas Schmall, Group Board Member Technology; Hon. François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry

The Volkswagen Group and its battery company PowerCo have selected St. Thomas, Ontario, to establish Volkswagen’s first overseas gigafactory for cell manufacturing.

Volkswagen Group is one of the world’s largest automakers, with US$295.8 billion in revenue (C$406 billion) in 2022. It manages a portfolio of ten companies.

The plant is slated to be up and running in 2027.

“Our North American strategy is a key priority in our 10-point-plan that we’ve laid out last year,” said Oliver Blume, CEO Volkswagen Group.

“With the decisions for cell production in Canada and a Scout site in South Carolina we’re fast-forwarding the execution of our North American strategy.”

After VW’s Salzgitter, Germany, and Valencia, Spain, plants, this will be the third Group-owned plant worldwide and PowerCo’s first cell factory in North America. It will equip the Group brand’s BEVs in the region with battery cells ‒ and is part of a larger plan that Volkswagen and PowerCo agreed upon with the federal government in August last year.

That agreement focused on deepening cooperation on sustainable battery manufacturing, cathode active material production and critical mineral supply, among others, and on setting up a Canadian office for PowerCo, which has been recently established.

“Today’s announcement by Volkswagen is a true testament to our highly skilled workforce and Canada’s strong and growing battery ecosystem,” said François-Philippe Champagne, minister of innovation, science and industry.

“VW’s decision to establish its first overseas gigafactory in Canada speaks to our country’s competitiveness when it comes to attracting major investments. It is also a vote of confidence in Canada as the green supplier of choice to the world. With Volkswagen and PowerCo, our government looks forward to working together towards a cleaner, more sustainable and resilient economy.“

The VW Group brands plan to introduce more than 25 new BEV models through 2030.

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The good news is light vehicle sales in Canada were up 5.1 per cent in February compared to one year ago, according to DesRosiers Automotive Consultants.

The bad news is that it wasn’t a high bar to jump over. Last month was still the second-worst February for sales in the last 10 years with 100,000 new vehicles sold.

That said, DesRosiers preferred to look on the bright side of things.

“The market has now achieved year-over-year gains in four straight months as the breadth of improved vehicle availability gradually widens, and consumer spending remains resilient,” said Andrew King, the firm’s managing partner.

The SAAR for the month came in at 1.70 million units, which is pretty much in line with the level seen in January, DesRosiers noted. If it goes as suggested, the firm is pegging sales to spike in March to almost 180,000 units before coming down to about 160,000 in May and June. From there, it expects sales to tail off each month and end the year at about 120,000 units in December.

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While luxury brands took the top two spots, mass-market vehicles finished with above-average scores in dependability compared to higher-priced brands.

In the J.D. Power 2023 U.S. Vehicle Dependability Study, Lexus topped the rankings with 133 problems per 100 (PP100), followed by Genesis at 144 PP100. The next ranked luxury brand was BMW with 184 PP11, just above the industry average of 186 PP100.

Kia placed third overall, starting a string of placements for mass-market vehicle brands with a score of 152 PP100. It was followed by Buick (159 PP100) and Chevrolet (162 PP100) to round out the overall top five.

Luxury brands like Audi (252 PP100), Lincoln (259 PP100) and Land Rover (273 PP100) not only finished well below industry averages, they scored the worst in the rankings.

Tesla scored 242 PP100 but J.D. Power noted that it couldn’t be placed in official rankings because it did not meet the award criteria of the study — the company doesn’t allow J.D. Power access to owner information in states where permission is required by law.

The industry average of 186 represents an improvement of six points from 2022. The study examined how 2020 model-year vehicles are performing today when it comes to quality, component replacement and appeal — including those vehicles with new technology. The lower the PP100 score, the higher the performance.

Click to expand

Mass market brands scored an overall average of 182 PP100 while luxury brands came in at 205 PP100.

The gap between the two segments is at its widest since the study launched 34 years ago. However, there is an explanation for the gap: New technology. By being first introduced to luxury brands, it has a higher chance of failure before reaching mass market brands. The higher complexity of the technology brings the likelihood of more problems.

“It is typical in the automotive industry to roll out concepts and features by putting them in premium vehicles first,” said Frank Hanley, senior director of auto benchmarking at J.D. Power.

The study covers 184 specific problem areas across nine major vehicle categories: Climate; driving assistance; driving experience; exterior; features/controls/displays; infotainment; interior; powertrain; and seats.

The study also found that infotainment systems remain most problematic with an average score of 419.9 PP100. That’s more than double the next highest category, exterior. The study found issues in six areas: Built-in voice recognition, Android Auto/Apple CarPlay connectivity, built-in Bluetooth system connectivity, touchscreen/display screen difficult to use, not enough power plugs/USB ports and navigation system inaccurate/outdated map.

Technology is important to consumers as vehicle satisfaction correlates with how up to date the vehicle’s tech is. “Satisfaction scores for vehicle condition improve when vehicles receive over-the-air software updates to infotainment systems that are perceived to not be meeting today’s standards,” J.D. Power said.

Of note, J.D. Power noted a reduction in component replacement. When not including wear items, almost two-thirds (63 per cent) of vehicles required fewer component replacements in the past 12 months — including key fob/key fob battery; brake rotors; headlight components/bulbs; and other exterior lights/bulbs — than in the 2022 study.

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When sunglasses just won’t do, a windshield that dims on its own just may be the answer.

The U.S. Patent and Trademark Office awarded General Motors a patent for a windshield capable of dimming when experiencing excessive glare from oncoming vehicles. And when paired with an augmented reality heads-up display (HUD), drivers will see approaching vehicles highlighted.

The details were published last month while the application was made last summer, according to Glassbytes.com

GM Global Technology Operations noted that excessive glare can come off from the headlights of vehicles travelling in the opposite direction, making it a challenge for drivers to stay focused on the road.

“It is therefore desirable to develop a system and a method that can minimize the effects of excessive glare while driving,” GM wrote in the patent.

Smart glass with electrically-tunable transmittance capabilities would be capable of dimming the particular areas of the windshield when bright light is identified, such as that from an oncoming vehicle’s headlights.

The windshield would identify whether or not a vehicle approaching in the opposite direction has its headlights on. Then, it would gauge the intensity of those headlines. If the beam intensity of the headlights is deemed to be beyond a pre-determined threshold, appropriate locations of the windshield will dim.

“The smart glass includes a plurality of segments,” the patent said. “Each of the plurality of segments is individually configured to transition between an opaque state and a transparent state independently of other segments. The method further includes determining which of the segments of the smart glass have to be dimmed to cover the light beam.”

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The sharp decline in new vehicle sales has pushed dealers to change strategies to expand repair service options and go after what is typically aftermarket business.

While car dealerships have generally focused on keeping new-to-five-year-old vehicles in their repair bays historically, they’re now putting more effort into attracting those typically in the aftermarket sweet spot, said a recent Aftermarket iReport from Lang Marketing. Furthermore, they’re expanding to offer service on all makes and models, not just their own.

New vehicle sales in Canada came in at 1.49 million in 2022, a 9 per cent drop from the previous year and the lowest number of total unit sales since 2009. In the U.S., full-year sales last year were 13.9 million, a nearly 8 per cent drop from 2021.

In Dealers Return to DIFM Prime Time, Lang reported that these figures are forcing dealers to think of new ways to keep repair business up as the fleet of new and newer vehicles shrinks. They’re “aggressively adapting to the changing DIFM market,” the report said.

So dealers are embracing an ‘all years, all nameplates’ approach that is expanded the range of vehicles they can attract to their bays.

This strategy includes emphasizing used vehicle sales as a way to supplement the lack of new vehicle sales — and direct customers to their service bays.

“To promote their service bays to used-vehicle buyers, many dealers are expanding their use of aftermarket brands, which generally have lower prices than OE parts, and are providing special promotions for frequently performed repairs,” Lang observed.

They’re also adding ‘quick service lanes’ to compete better with independent aftermarket repair shops.

“One major carmaker has stated that a significant portion of vehicles serviced in their dealers’ quick service lanes are nameplates other than their own,” Lang reported.

Ensuring high customer satisfaction is also part of the strategy. Their goal is to ensure the process of having a vehicle serviced is convenient and pleasant.

“This has enabled dealers to capture share from some of their DIFM competitors, especially service stations and garages, which have largely been unable to keep pace with the improving position of dealers in the eyes of many vehicle repair customers,” according to Lang.

When it comes to more complex repairs, dealers have positioned themselves as the most expert option for consumers — noting this is acting as a differentiator between dealers and the aftermarket.

“Dealers have invested in tools, equipment and training to meet the challenges of repairing today’s sophisticated vehicles,” Lang said.

The report further noted that plans of going after more DIFM customers have been in place since the end of the Great Recession more than a decade ago.

“They have begun to promote their service bays to all makes and all years of vehicles and emphasize used-vehicle sales as both a vehicle-sales profit center and a new stream of service bay customers,” Lang said.

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The unveiling of Project Arrow at the 2023 Canadian International AutoShow

The Canadian International AutoShow returned to Toronto after a multi-year COVID-forced hiatus.

The 50th edition of the show celebrated its in-person return during Media Day on Feb. 16, the day before the show officially opened to the public.

While organizers were excited to be back in person, the absence of many key automakers was noticeable.

Despite its all-electric i4 winning the Automobile Journalists Association of Canada’s Car of the Year in Canada for 2023 — the first fully electric model to take home the title — BMW did not exhibit at the show. The list of no-shows included Honda, Mazda, Ford, Volkswagen and Mercedes.

Floor space was made up of larger-than-usual exhibits from those participating — such as an off-road-style track from Jeep that showed the capabilities of its electric sport utility vehicles in the Camp Jeep Exhibit.

 

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The day kicked off with the unveiling of Project Arrow, the all-Canadian electric vehicle that first debuted at the Consumer Electronics Show in Las Vegas last month. It will be on a two-year tour around the world to showcase Canadian manufacturing strength as all parts and components come from Canadian suppliers. The project was put together by the Automotive Parts Manufacturers Association.

As mentioned, the BMW i4 won the Car of the Year Award. The Hyundai Ioniq 5 took home the honours for top utility vehicle for 2023. Both are fully electrified vehicles.

As expected, electric vehicles were front and centre throughout the show floor with every manufacturer showing off their latest offerings.

The show reported record attendance its first few days, including a record of more than 56,000 people on Feb. 19. The show reported the previous two days were also record-breakers with organizers calling it the biggest two-day opening in the event’s history.

The show runs until February 26 at the Metro Toronto Convention Centre in Toronto.

Canadian International Auto Show 2023

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Even though there has been relief at the pumps, gas prices are still elevated. Add in higher interest rates and overall inflation creating challenges everywhere they shop and car shopping appears to be low on the list of many consumers.

Car owner app Jerry released findings from its annual State of the American Driver Report. It surveyed more than 1,200 people in the U.S. across four generations to gauge the financial burden they’re facing and how their purchase patterns have changed.

Fewer than a quarter (24 per cent) of respondents said they plan to car shop. Vehicle prices and interest rates were listed as the biggest obstacles. If prices and interest rates come down, that could send about another 27 per cent of people to showrooms. Still, about half (49 per cent) said they had no interest in buying a new vehicle.

“The disruption we’re experiencing in the car market is likely to continue for at least another year or two,” said Henry Hoenig, data journalist at Jerry and the study’s author. “Supply-chain problems that have hit vehicle production are not fully resolved and the supply of newer used vehicles likely won’t return to normal until at least 2025. This means used-car prices will probably remain elevated, even if they fall somewhat from the recent highs.”

Almost half (49 per cent) of respondents said they’ll look at buying or leasing an electric vehicle as their next car. That’s a jump of 10 per cent from its last report, which Jerry attributes to record high gas prices consumers saw in 2022. For those who want to stick with their traditional gas-powered vehicles, the majority cited concerns about charging inconvenience and high vehicle prices as their main reasons to do so.

While Tesla remains the top choice of EV among consumers, more are willing to look elsewhere. About two-thirds said another brand would be their first choice, with Ford, Chevrolet and Hyundai being the top picks after Tesla.

One-third of drivers surveyed who bought a vehicle in 2022 said they ended up buying used instead of new because of limited supply at dealerships. A quarter of respondents said they bought a make or model that wasn’t their first choice, while 24 per cent paid more than they first budgeted. Another 15 per cent felt they paid more than the car was worth and nearly 10 per cent said they’ve taken on an uncomfortable debt level to pay for the vehicle.

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Like last year, new vehicle sales in Canada are off to a strong start. In fact, both sides of the border are reporting a solid January. But time will tell if 2023 cools off and plays out similarly to 2022.

Sales in January 2022 got out to a hot start in Canada with the highest seasonally adjusted annual rate of any month last year at 1.67 million units. With an estimated 98,259 units sold in January 2023 — up 7.5 per cent from last year — the pace is stronger this time around at 1.79 million, according to DesRosiers Automotive Consultants.

Last year, though, saw sales tail off to finish at 1.49 million units. The hope is that the market will avoid the spring drop-off this year, using the January start as a strong building block for growth, said Andrew King, Managing Partner at DesRosiers.

“Significantly, we are seeing signs of improved vehicle availability at a growing list of manufacturers and — while there are still some noticeable gaps — the breadth of the recovery in inventory has definitely spread,” he said.

Meanwhile, U.S. numbers are also off to a promising start — though watchers are being warned not to get too excited.

S&P Global Mobility projected sales down south at 1.015 million units, putting it on a sales pace of 15.5 million. The U.S. ended 2022 with 13.9 million in sales.

Though the group cautioned that we’ve seen this play before — things look great to start while underlying issues are keeping the industry in flux.

U.S. sales followed a similar path to Canada’s: A strong start and a sputtering end.

“Auto consumers continue to be impacted by an uncertain purchase environment. While positive developments regarding mildly retreating vehicle prices and rising pockets of inventory bode well, interest rates remain high and economic headwinds persist,” said Chris Hopson, principal analyst at S&P Global Mobility. “None of these issues will be resolved quickly as we move through 2023. The January 2023 expected SAAR reading may have jumped from the month-prior reading of 13.3 million units, but the unsteady combination of consumers, inventory and economic conditions will dictate monthly new vehicle sales levels.”

As for its outlook for the year, S&P projects 14.8 million units sold, which would still represent a 7 per cent increase from last year.

“The advancing production levels, along with reports of sustained retail order books, recovering stock of vehicles, and a fleet sector that remains starved for product should provide some impetus to auto demand levels even as an economic recession looms,” its announcement said.

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Changes to personal financial situations led by economic challenges and inflation may delay offset pent-up demand for new vehicles, according to an industry observer.

“It has caused the demand to be destroyed completely, we don’t expect now that we’re going to have that whip effect where we come back over the line, recover some of those lost sales,” said Todd Campau, automotive aftermarket practice lead at S&P Global Mobility.

What was once classified as a supply constraint may now instead be a demand constraint as people re-evaluate their financial situation.

“So those sales are essentially lost for now,” Campau said of new vehicle sales in the next year or so.

You may notice more vehicles in dealer parking lots these days as you drive by.

“They’re starting to get out of that point of where they were selling every vehicle that they were getting,” he said at AAPEX 2022 during his 5 Trends impacting the North American Aftermarket presentation.

“For a while [in] their dealerships, every vehicle that’s coming in on the truck already was assigned to a buyer. They’re starting to get out of that. We’re starting to see the restock at the dealer at last begin.”

This is good news for the automotive aftermarket. If new vehicle costs are too high, widening the gap between the ‘repair or replace’ debate, consumers will most likely opt to keep their older vehicle and have it serviced by the aftermarket to keep it on the road.

Average vehicle cost is also playing a role in softening demand. In the U.S., the average vehicle costs almost $50000, according to Kelley Blue Book. With a smaller pool of chips available, automakers are diverting supply to higher-end vehicles, which is driving up costs to the consumer, Campau reported. There has also been increased demand for higher-priced electric vehicles, which average more than US60,000.

“I don’t think that’s sustainable,” Campau observed. “I think the average price of a new vehicle is going to have to come down. But it’s not going to come down until it has to. The manufacturers will continue to make money while the making’s good. And so they’re going to continue to use those vehicles that are selling.”

Demand will drive prices down but not to pre-pandemic levels where the average cost in the U.S. was $33,000, he added.

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There’s no visible end in sight for rising prices of new vehicles, a recent report suggested.

The average transaction price of a new vehicle in the U.S. hit a record high in December at US$49,507, according to data from Kelley Blue Book. That’s an increase of nearly 2 per cent from November and 5 per cent compared to the same time a year before.

This is happening despite inventory levels of new vehicles are inching upwards from historic lows earlier in 2022.

Transactions have also been processing above the manufacturer’s suggested retail price — or sticker price — for more than a year.

In Canada, new vehicle sales failed to cross 1.5 million units last year, the first time that’s happened since 2009.

Kelly Blue Book, a Cox Automotive company, is blaming elevated prices and high loan rates for putting downward pressure on sales in the U.S.

“The transaction data from December clearly indicates overall prices showed no signs of coming down as we headed into year-end,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Luxury prices fell slightly in December, but non-luxury transaction prices were up. Truck sales were particularly strong last month, and with many trucks selling for more than $60,000, a new record was all but inevitable.”

Electrics vehicles saw a drop in price in December compared to the month before, down 5.5 per cent. The average new EV sold for US$61,448, according to Kelley Blue Book estimates. While that’s still above average, price drops were attributed to significant price cuts at Tesla at the end of the year.

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This year could be another difficult year for automakers and dealers, according to forecasts.

While supply chain disruptions that prevailed in 2021 and 2022 are easing, the situation is not yet expected to return to a pre-COVID state this year. Furthermore, rising predictions of the global recession are putting a dampener on sales forecasts and estimated volumes.

The global auto industry is projected to make almost 83.6 million units of new vehicle sales in 2023. This is a mere 5.6% increase over 2022, according to S&P Global Mobility. On the back of this modest increase, automakers’ overall profitability will fall. As a result, they need to tighten their pricing policies to cater to customers with shrinking wallets.

Nevertheless, 2023 is still predicted to bring some exciting developments for the industry. Here’s a look at some of the top trends we’re expecting.

New car prices will drop

The price of new cars will drop as automakers and dealerships are forced to cater to the reduced purchasing power of customers. This will be a shift from recent OE strategy that saw them focus production on more expensive vehicles during the height of chip shortages. Even if the much-vaunted recession hasn’t hit in full swing, customers will understandably be cautious and seek the best deal. They will intensively research, shop around, compare and negotiate.

The used car market will ease

COVID-19 saw new car prices skyrocket as supply chain disruptions and global pandemonium created shortages and delays. Conversely, this placed pressure upon the used car market, sending used car prices upwards. With the easing of supply shortages and delays, used car prices are expected to plateau and decline throughout the year. For consumers, it’s probably a great time to think about purchasing a used car.

The EV, hybrid push will intensify

This year, we will see several EV models hit the market along with EV variants of existing gasoline and gasoline hybrid models. Chevrolet has several planned, including the Silverado EV as a direct competitor to Ford’s F-150 Lightning. Speaking of Ford, the Explorer EV is also expected to be released. Other popular ICE vehicles are also being made available as electrics, such as the GMC Sierra EV and Jeep Wrangler EV. The trend here is an increase in larger vehicles being made available, which also includes the Porsche Macan EV and Tesla Cybertruck. Other brands are also expanding offerings, such as BMW and its i7; Kia and the EV9. Luxury brands are not exempt with the Maserati Grecale Folgore and the Mercedes-Benz EQG also expected to arrive this year as well.

EVs aren’t everyone’s preference, and automakers know that. They can’t convert their iconic ICE-engine nameplates into EVs, as Ford is finding out with the Mustang Mach-E. Hence, hybridization offers a win-win situation. Some notable names becoming available in hybrid form include the Chevrolet Corvette E-Ray, Porsche 911 Hybrid, BMW XM, Aston Martin Valhalla, Lexus UX, Mercedes-AMG C63, Alfa Romeo Tonale and Genesis G90.

More autonomous vehicles

Autonomous vehicles will become more mainstream in 2023, at least in a semi-autonomous capacity for most. Many cars, trucks, and SUVs offer some Level 1 and Level 2 autonomous vehicle features. You’ll get adaptive cruise control with stop-go, lane centring, lane following, automatic overtaking, and traffic sign recognition. As autonomous tech becomes more commonplace, expect to see more cars driving themselves, at least in part.

Vehicles will talk to each other and their surroundings

The rise of the connected car has been happening for a few years now and is projected to continue through 2023. Vehicles will talk to each other, enabling smarter navigation, traffic jam avoidance, and hazard reporting. Our relationship with cars will change, with connected cars becoming prevalent.

EVs will be easier to recharge

One of the largest hurdles to purchasing an EV is the lack of charging infrastructure. Many remain hesitant to go electric even with the increasing number of EVs with more than 300 miles of range.

It’s true that EV charging still won’t achieve the same speed as pumping a full tank of gas. But the proliferation of fast-charging EV networks is expected to increase exponentially in 2023. Forbes expects to observe a reduction in home charging. And more EVs will receive their top-ups at workplaces, restaurants, shopping centers and dedicated charging stations.

The sales experience will change

Customers will still travel to a dealership to purchase a car, but they will no longer physically shop around. Instead, they’ll use online tools to find the best deals around and research their preferred model and spec. Then, car shoppers will utilize virtual showroom experiences to check out their prospective new car. Chances are that when a customer walks onto the dealer, they already know what they want.

Demand for aftermarket accessories will increase

According to Business Motoring, an 8.5 per cent increase in the demand for aftermarket accessories, such as seat covers, wheels, tires, and tech gadgets, is forecasted for 2023. While car shoppers may be more price-savvy, they will still want to customize their vehicles. The prevalence of high accessory prices, coupled with relatively limited choice at dealerships, will lead to a rise in aftermarket accessories purchased from third-party online and offline vendors.

Carmakers will dabble in subscription services

BMW created an uproar in 2022 when they started charging $18 per month for using the heated front seats on some connected BMWs. Tesla also has the capability to upgrade or downgrade cars via an OTA update. Automakers have been toying with the subscription-based service idea for years and are cautiously experimenting with it now. Customers don’t like the idea of having to pay more for something that’s already installed in their car. You can expect the aftermarket to find ways to crack these systems, too.

2023 will be interesting and remembered

The year is already shaping up to be an interesting year and may well be a pivotal point in automotive history. Auto prices may drop marginally. There will be more EVs and hybrids on sale and charging them will be easier. Furthermore, the sales experience will evolve, the aftermarket will thrive, and car enthusiasts will have plenty to talk about.

Cedric Jackson is passionate about internet marketing, automotive, travel, and the entertainment world. When not busy writing, he spends his time travelling, reading and keeping up with world events.

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While one of the most popular vehicles stayed at the top of the list for car buyers, more economical options are surging in popularity.

A pair of car-buying platforms recently released lists of the most popular vehicles consumers search for.

For AutoTrader released data on the most searched vehicles on its website. At the top of the list was the Ford F-150. Second was the Honda Civic, which jumped four slots compared to last year. Toyota’s Corolla and Camry models also moved up several spots and into the top 20. Notably, the Corolla went from 23rd place to 15th, a jump of eight spots. It’s the first time since 2019 that it appeared on the list of 20 most-searched vehicles.

Meanwhile, Clutch had the Honda Civic as the most-sold vehicle on its platform, followed by Toyota’s Rav4 and Corolla. In terms of searches, the BMW 3 Series, Hyundai Elantra and Mazda CX-5 made up the top three. Comparison website Compare The Market reported that Toyota was the most-searched car brand in the world in 2022. However, Ford was the brand both Canadians and Americans looked for last year, according to Google Trends data it compiled.

In an announcement, AutoTrader attributed the increased interest in smaller and fuel-efficient vehicles to the cost of living and gas prices being on the rise in 2022.

AutoTrader suggested that these shifts mean that passenger cars are still popular as Canadians try to find more economical options.

“2022 has been exceptionally different to previous years — with higher costs of living, vehicle shortages, and economic pressures top of mind,” said Ian MacDonald, chief marketing officer at AutoTrader. “However, it is encouraging that Canadians’ vehicle purchase intentions remained consistent, as they looked for ways to make financially-savvy decisions, including a willingness to be flexible on vehicle selection, and spending more time researching and leveraging tools like the marketplace in their car shopping journey.”

The 10 most popular vehicles searched for were: Ford F-150, Honda Civic, BMW 3 Series, Ford Mustang, Mercedes-Benz C-Class, Porsche 911, Toyota RAV4, Mercedes-Benz E-Class, Chevrolet Corvette and Jeep Wrangler.

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It’s been a while since Canada saw such a weak number of new vehicle sales.

With 1.49 million units sold in 2022, it was the first time since 2009 that the final number failed to cross 1.5 million, according to DesRosiers Automotive Consultants.

Sales were also down 9 per cent from last year overall, despite promising signs to start the year. In January, the seasonally adjusted annual rate put vehicle sales at 1.67 million. But it was not to be as “things deteriorated rapidly,” DesRosiers noted in its analysis.

That said, there is a glimmer of hope. The fall months have provided year-over-year increases. December 2022 closed out with a 5.5 per cent increase compared to 2021.

“To be sure, it has been what we here at DAC have termed a ‘U2’ recovery — uneven and unequal — with huge disparities between manufacturers’ inventory recovery,” its analysis said. “However, we can but hope that 2023 breaks the trend of the last three years and provides the industry with a string of sales gains through the first months of the year.”

Ford held on to the top spot in overall sales volume. Its 240,325 units sold for the year were only slightly below its 2021 results.

But the outlook as to what might happen this year is anything but clear. “The big question that lies ahead will be the balance between improved vehicle inventory, pent-up demand and deteriorating economic conditions,” observed managing partner Andrew King. “It could well be that vehicle sales in Canada climb even as the country enters a recession.”

Indeed, these sentiments were recently echoed by Jeff Schuster, president of global forecasting at LMC Automotive, during a fall 2022 event.

“And that is hard to digest as a forecaster,” he said at TalkAuto, hosted by Canadian Black Book. “But I think if you look at the obviously the progression of where things have come, we’re still well below demand from a supply standpoint.”

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Canadians are changing their views on the types of vehicles they want going forward, a new study suggested.

A recent AutoTrader report found that car buyers in this country are looking for more economical vehicles as the Honda Civic and Toyota Camry and Corolla jumped in searches on its website in 2022.

Looking ahead into 2023, online vehicle marketplace looked at what consumers are thinking about in terms of their vehicles.

At the top of the list was the increased interest in electric vehicles. AutoTrader reported that interest has been climbing for years and hit new heights in 2022. As gas prices skyrocketed in the spring of 2022, so did searches for EVs —an increase of 89 per cent year-over-year.

Indeed, a survey from financial comparison website Compare the Market surveyed Canadians and found the majority want to go electric. S&P Global Mobility’s third-quarter data show Canadians are registering zero-emission vehicles at a quickening pace.

Two-in-three users told AutoTrader that gas prices were behind their interest in EVs. “Throughout 2022, the number of car shoppers inquiring about EVs climbed up 148 per cent compared to the same time last year,” it stated.

Searches for EVs were the highest in B.C. — which, in addition to Quebec, is the only province to offer purchase incentives — and Ontario. AutoTrader noted that the marketplace is looking to keep pace as more trucks are now available for consumer purchase and more performance-based options will become a trend in 2023.

Consumers were also quicker to buy new vehicles last year. The average time a new vehicle spent on AutoTrader dropped 43 per cent, from 86 days in 2021 to 49 days in 2022. Car buyers are ready to adapt to the market, willing to change brand and model, while also willing to pay more due to shortages.

However, used vehicles may continue to be the preferred option as prices begin to soften. AutoTrader expects this area to be appealing as a third (36 per cent) of Canadian vehicle shoppers said they’re willing to switch from purchasing new to used, a 10 per cent jump from 2021.

And the company expects purchase intent to remain strong despite other financial challenges among consumers. Its research showed that intention to buy went from 18 per cent in March to 24 per cent in October.

“The study revealed that car shoppers’ budgets likely won’t change even if the market does, regardless of if the economy stays the same or declines,” it said.

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The supply of used vehicles is going to continue to struggle for at least six more years, according to an expert.

New vehicle sales have been at levels not seen in years. Used vehicle inventories are so low that values of what’s out there have hit levels never seen before.

And without enough new vehicles to keep the used market moving — DesRosiers Automotive Consultants recently noted that without a big December, 2022 sales will be the lowest since 2009 — the aftermarket could stand to benefit as consumers will opt to maintain and repair their current vehicle rather than replace it.

Automakers are struggling to replenish inventory as shortages of semiconductors plague production. They’re putting whatever semiconductors they have into higher-end vehicles. There’s little relief in sight.

“Right now, supply is going to get worse before it gets any better,” said Daniel Ross, senior automotive analyst at Canadian Black Book.

“New volume and production for the last two, two and a half years have been suppressed,” he added during the TalkAuto event, hosted by Canadian Black Book in November in Woodbridge, Ontario. “And it’s been very low. And we’re all suffering from low inventory, ultimately, across the board.”

This means that the supply of used vehicles will be constrained even longer. Without a sudden replenishment of new vehicles, consumers will have fewer less expensive used options.

“So what we’re going to see is, used vehicle supply is going to stay suppressed, it’s going to stay low,” he observed. “Without that gateway from new cars, inventory is not really going to start replenishing until about the 2028 timeframe.”

There could be some sort of relief sooner as consumers may opt for longer lease terms to counter high interest rates and ease their monthly payments but that would have a minimal effect on things, Ross said.

Even so, as interest rates go up — and economic pressures continue — that could keep people away from any sort of vehicle purchase. So expect used vehicles to remain expensive and vehicle owners to opt to repair rather than replace.

“With that low used car supply, that’s going to keep retained values elevated,” Ross reported.

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November showed some signs of life as far as new vehicle sales are concerned.

However, DesRosiers Automotive Consultants cautioned not to be too overjoyed at the numbers. “It is hard to be too positive about the big picture performance,” its announcement said.

Drawing parallels to Canada’s performance at the World Cup — the country’s first goal ever in the tournament was recorded but the end result left more to be desired — DesRosiers reported November unit sales up 4.1 per cent compared to last year, though the 2021 numbers didn’t set a high bar to jump over.

November’s performance helped lift the seasonally adjusted annual rate to 1.51 million. An improvement from summer numbers but below what was originally anticipated at the start of the year.

Andrew King, Desrosiers managing partner, is pessimistic that number will be reached in the end. He noted that sales year to date stands at just 1.38 million units. Barring a big December, it’s more likely than not that 2022 will finish the year below 1.5 million units sold.

“If this is indeed the case, it will be [the] first year the market has fallen below this threshold since 2009,” he said.

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The New Car Dealers Association of BC (NCDA) has announced the cancellation of the Vancouver International Auto Show.

It was set to run March 22-26 at the Vancouver Convention Centre West.

Organizers said the “difficult decision” was made due to continuing challenges in the supply chain that are plaguing the automotive industry.

“For the last several months, we have been working with vehicle manufacturers and other partners in anticipation of returning in person to celebrate the 100th edition in the traditional auto show in March,” said Blair Qualey, president and CEO of the NCDA. “Unfortunately, ongoing global supply chain issues mean that a number of manufacturers and distributors are not in a position to commit to participating in many North American auto shows, including Vancouver.”

The lack of participation from automakers means the group wouldn’t put on the type of show that would meet the expectations of organizers and automotive enthusiasts, he added.

“We want to extend our thanks to the many dealership members, partners, sponsors, industry partners — and especially auto enthusiasts from across this province, for their patience and understanding,” Qualey said.

Just the week before, Ford announced it wouldn’t participate in any Canadian automotive show. The Detroit automaker reasoned its decision by saying it is looking for new ways to connect with consumers following its investments in electrification.

The Montreal International Auto Show is scheduled for Jan. 20-29. A late-November announcement highlighted that upwards of three-quarters of the most popular brands and models would be on display.

“The shortage and lack of inventory [due] to the global supply chain issues [affect] the entire industry and our show as well,” said Luis Pereira, the show’s executive director. “Some manufacturers will not be present, but those who will be with us are very excited to present their products to the enthusiasts.”

Toronto’s Canadian International Auto Show is set to run Feb. 17-26. Tickets recently went on sale for the 50th anniversary show.

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The Ford Edge on display at the Canadian International AutoShow in February 2018. Ford has always occupied a large space at the show.

You won’t see any Ford or Lincoln brand vehicles if you head to an auto show in Canada in 2023.

Just as the three biggest shows are preparing to return in Montreal, Toronto and Vancouver, Ford announced it was pulling out of every show in the country.

Ford told Automotive News Canada that both its brand and the Lincoln brand won’t make an appearance.

It reasoned the decision by saying the industry is undergoing rapid change. Investments going towards the electrification of its fleet means it has to find new ways to connect with car shoppers.

Franchised Ford dealers could set up their own exhibits at Canadian shows but it’s not yet known if they will.

The Montreal Auto Show is scheduled for Jan. 20-29. Toronto’s Canadian International Auto Show is set to run Feb. 17-26. The Vancouver International Auto Show will go from March 22-26. Calgary’s auto show was cancelled entirely as not enough automakers showed interest.

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2021 Honda CR-V Touring

Vehicle thefts have long been an issue for Canadians but even more so if you own two vehicles in particular.

The Honda CR-V had the most thefts while Lexus RX Series vehicles were stolen at the highest rate, according to data from Équité Association.

The group, established by the property and casualty insurance industry to provide fraud analytics for vehicle, property and cargo recovery, noted that all high-end vehicles, regardless of manufacturer, are targets for thieves. That includes pick-up trucks, SUVs and luxury cars.

Thieves exploit technology through relay attacks and connecting to the on-board diagnostic port. This allows them to reprogram key fobs. Organized crime networks are stealing vehicles in greater volume for export internationally. Montreal is the main exit port for stolen vehicles, the association said.

At the top of the list was 2016-2021 Honda CR-Vs. With 236,555 insured vehicles in Canada, 4,117 were stolen — at a rate of 1.7 per cent. By comparison, there are more Ram 1500s (295,341 insured vehicles; 509 stolen) Ford F-150s (292,127 insured vehicles; 1,182 stolen) and Honda Civics (263,958 insured vehicles; 768 stolen) and all were stolen at a lower rate.

However, 2016-2021 Lexus RX Series vehicles were stolen at by far the highest clip. With 34,560 insured vehicles, 2,202 were stolen — a theft rate of 6.4 per cent.

Regionally, the Lexus RX Series is most likely to be stolen in Ontario — 9.4 per cent of all these vehicles in Ontario are stolen. The Honda CR-V is stolen the most in Quebec at 4.85 per cent. In Alberta, it’s the Ford F-350 series with a theft rate of 3.85 per cent. In Atlantic Canada, the Ram 1500 Series leads the way, with 0.14 per cent of those vehicles stolen.

“Not only does auto theft cost Canadians millions of dollars each year, the proceeds of this illegal activity also fund organized crime and terrorism, both domestically and internationally,” says Bryan Gast, vice president of investigative services at Équité Association. “Canadian property and casualty insurers are invested in finding solutions to the complex problem of auto theft and in helping to create safer communities for all Canadians. Équité Association is member funded and supported, which demonstrates the insurance industry’s commitment to tackling fraud and crime through partnerships, collaboration, and best-in-class data and analytics.”

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Groupe Park Avenue announced the appointment of Maggy Michaud as general manager of Léo Harley-Davidson.

She has been with the company, located on the South Shore of Montreal in Brossard, for 15 years. After serving as service department director, Maggy took over the reins of fixed operations more than a year ago “and has demonstrated a great deal of rigour, professionalism, and motivation to the team in place, guiding them through a post-pandemic year with ambitious results,” the announcement said.

“Over the years, she has distinguished herself through her skills and positive leadership. I am confident that she will be able to successfully meet the challenges that her team will face in the short, medium, and long term,” said Norman John Hébert, vice president and chief operating officer of Groupe Park Avenue.

“I am very excited to be taking on this new role with a dealership I am passionate about. It’s especially gratifying to take my place as a female leader in an industry that tends to be predominantly male,” Michaud said.

“I am very grateful for the trust placed in me by the management team of Groupe Park Avenue, and it will be a pleasure to develop and make the Harley-Davidson brand shine in the coming years.”

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The world’s top automakers are preparing to spend more than a trillion dollars by the end of the decade on developing and producing electric vehicles, batteries and the raw materials to support production.

According to Reuters, which analyzed public data and projections released by carmakers, the investment of $1.2 trillion (all figures in U.S. dollars) is more than double its most recent calculation from just a year ago.

The companies plan to build 54 million battery electric vehicles in 2030, making up more than half of the total vehicle parc, Reuters found.

With so many EVs, Reuters cited data from Benchmark Mineral Intelligence and manufacturers that showed automakers and their battery partners are planning to install 5.8 terawatt-hours of battery production capacity by 2030.

Tesla plans to build 20 million EVs in 2030 — it hopes to sell 1.5 million vehicles in 2022. This will require an estimated 3 terawatt-hours of batteries. The company recently announced it was working on a smaller vehicle platform with the aim to cost half as much as the Model 3 and Model Y.

Volkswagen is putting aside more than $100 billion to build out its global EV portfolio. It will also add new battery “gigafactories” in Europe and North America while locking up supplies of key raw materials.

Toyota, including its Lexus brand, is investing $70 billion to electrify vehicles and produce more batteries. It expects to sell 3.5 million EVs in 2030 by offering 30 different models.

Ford is now committed to spending $50 billion and at least 240 gigawatt-hours of battery capacity. It’s working with partners to produce about three million BEVs in 2030. That would represent half its total volume.

Mercedes-Benz is investing at least $47 billion for EV development and production — about two-thirds of that is to boost its global battery capacity with partners to more than 200 gigawatt-hours.

Meanwhile, BMW, Stellantis — which includes the Alfa Romero, Maserati and Chrysler brands — and General Motors each have earmarked at least $35 billion for EVs and batteries.

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The first half of this year has seen Canadians buy zero-emissions vehicles at a higher pace than ever before.

After 2021 finished with 5.2 per cent of new vehicle registrations being ZEVs, the first half of 2022 saw that number rise to 7.2 per cent, according to DesRosiers Automotive Consultants.

The first half numbers are more than double that of all of 2020, which saw 3.5 per cent of new registrations as ZEVs.

Most ZEV sales have been battery electrics, making up 5.4 per cent of total registrations. That’s up from 3.6 per cent in 2021.

Provinces with purchase incentives lead the way in the number of new registrations. British Columbia led Canada for ZEV registration share at 14.6 per cent. Quebec trailed at a share of 11.4 per cent.

Ontario came in third at 5.5 per cent for the first half of 2022. New Brunswick (2.2 per cent) and Saskatchewan (1.5 per cent) rounded out the top five.

“The uncoordinated nature of provincial approaches to ZEVs continues to distort the market,” said Andrew King, DesRosiers’ managing partner. “The scattergun provincial programs, while well-intentioned, are creating as many problems as they solve — an outcome that unfortunately looks likely to continue in the months and years ahead.”

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The electric Chevrolet Bolt at the 2019 Canadian International Auto Show

The Volkswagen ID.4, Chevrolet Bolt, Hyundai Kona Electric and Hyundai Ioniq 5 are the top-selling electric vehicles in Canada, according to Kijiji Autos.

The company is reporting an increase in listing for EVs this year, reporting that sales grew by 60 per cent in 2021, plus another 11 per cent in the first half of this year.

Kijiji Autos also reported that searches for EVs on its website more than doubled between the second quarter of 2021 and the second quarter of 2022. Meanwhile, the number of leads for electric vehicles nearly tripled.

Looking to the next year ahead, the company is expected to see EV sales rise again with no slowdown into 2035 when sales of internal combustion cars have been mandated to end.

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It hasn’t been since September 2009 that new vehicle sales in Canada in September were this low.

At that time, consumers were at the heart of the Great Recession. This time around, supply shortages persisted to keep numbers down, according to figures from DesRosiers Automotive Consultants, even lower than one year prior.

An estimated 130,421 light vehicles were sold in September 2022, down from 136,584 last year, a drop of 4.5 per cent.

That puts the seasonally adjusted annual rate of sales at 1.48 million, in line with what has been seen in the past two quarters.

However, the ‘Detroit Three’ saw “remarkable gains” in the third quarter. But DesRosiers tempered the news with the fact that much of that is a recovery from a tough summer of 2021 when semiconductor shortages hit them hard.

GM saw a 27.6 per cent increase from last year to lead the market. But at the other end, Honda saw a 37 per cent drop.

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The parent of CARS, Jobber News and Auto Service World is set to launch a new magazine for automotive service providers focused on electric vehicles.

Turnkey Media will publish EV World, to guide ASPs as they hone their skills for an electrified future.

The quarterly magazine will provide readers with technical articles and how-to guides to get familiar with electrics. ASPs will also be able to keep on top of the latest news, whether it’s from the government, automakers, parts manufacturers or other corners of the automotive industry.

“We’re moving towards an electrified world,” said Peter Bulmer, publisher of Turnkey’s automotive publications. “Everyone from manufacturers to technicians will be affected by this change. We want to provide a space for the industry to learn together and prepare for what’s ahead.”

The publication will track consumer habits and keep ASPs in the know on what to expect from their customers as they hit the road in an EV. And, of course, the latest products and innovations will be delivered directly to professionals.

“These days, there isn’t a conference that doesn’t have a section dedicated to electrification. Some events are dedicated entirely to the technology,” Bulmer added. “It’s a sign of the times. ASPs need to stay on top of developments, and this is one way they can.”

The magazine will be supported by an online portal that will launch along with the print edition.

To subscribe, click here.

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2022 Chevrolet Silverado LT

A new report shows that many of the most popular selling cars in the United States have seen a hefty increase over the last three years.

BestBrokers analyzed the price of vehicles in the U.S. and found increases as high as 22.2 per cent. That would belong to the Chevrolet Silverado, which jumped from an average price of $28,300 in 2019 to $34,600 in 2022 (all prices in U.S. dollars).

The Ford F-150, a long-time top-selling vehicle, went from $28,155 to $31,520 over the last three years. That’s a jump of 11.9 per cent.

“This [gives] us an insight into how the automotive industry has faced the changes in supply chains and logistics, imposed by the pandemic and the currently-raging energy crisis,” The BestBrokers report said.

Rounding out the top five most popular cars and their price increases, the Ram 1500 saw a 9.1 per cent increase to $36,500; the Toyota Rav4 went from $25,650 to $26,975, up 5.15 per cent; and the Honda CR-V jumped 9.6 per cent, from $24,450 to $26,800.

The GMC Sierra, the ninth most popular vehicle, saw the second-highest price jump, going from $29,600 to $35,400, a 19.5 per cent increase.

“With the rising inflation and energy prices, it comes as no surprise that the leading car manufacturers raise their prices in order to keep their margins to some extent,” said Alan Goldberg, market analyst at BestBrokers. “However, Toyota is the company that seems to desire even bigger market share than their competitors as they are known for their relatively high production quality, but their prices have increased very little compared to the other automakers.”

Indeed, the Toyota Camry (up 7.6 per cent), Highlander (up 6.3 per cent) and Tacoma (up 5 per cent), along with the Rav4, saw the lowest price jumps over the last three years.

“We are yet to see which direction the fossil fuel car industry will take with the rise in popularity of EV cars and the fossil energy price hike, but surely the market leaders will do their best to take advantage of the obstacles in the industry and try to get a bigger market share, thanks to the technology and resources they can rely on,” Golberg said. “It is very common for Asian automakers’ mentality to look at crises not only in a negative way but also as new opportunities and the minimal increases in Toyota prices seem to be confirming that.”

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