Semiconductor shortages, battery backlogs, soaring lithium and cobalt prices, record-high gas prices, war in Ukraine, lockdowns in Shanghai, the supply chain issues causing auto shortages are legion and well-documented. But new research just released by DesRosiers Automotive Consultants on June 8 highlights the fact that despite all these challenges, the “auto industry as a whole saw record dollar level figures of retail sales in Q1 this year.”
New car dealers saw a six per cent increase in retail sales that have risen above pre-pandemic levels. “While new and used car dealers have struggled with product shortages as a result of semiconductor supply issues, net dollars per unit have soared resulting in record retail sales” said Andrew King Managing Partner at DAC. “The aftermarket has shown remarkable resilience through the last couple of years and continues to act as a strong foundation of stability for all industry players.”
This positive trend is not confined to auto retail, as automotive parts, accessories, and tire stores also saw retail sales climb 7.6% in the first quarter from 2021 levels, “rising well above pre-pandemic highs” the report says.
Used car dealers’ sales were less outstanding, rising 1.9% for the first quarter of 2022. Nonetheless, it is still a positive indicator for the profitability and outlook for the Canadian auto sector as a whole.
But the smooth sailing may not be permanent, of course, as the report notes, “We do expect growth to falter for vehicle dealers in Q2 as vehicle supply shortages become more dire, but the outlook for the aftermarket is positive as kilometres driven continues to climb.”
