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Supply Crunch Impacts 2021 Vehicle Sales

Autosphere » Dealerships » Supply Crunch Impacts 2021 Vehicle Sales
The reopening of GM’s Oshawa assembly plant was a bright spot for Canadian vehicle manufacturing in 2021. General Motors

Despite shortages, new investments look to set to boost production.

In 2021, Canadian new light vehicle sales topped just over 1.1 million units. This represents a significant drop from the sales records set the previous decade, in which volumes regularly topped 2 million units,* according to data from DesRosiers Automotive Consultants. In fact, the last time Canadian vehicle sales stood at the 1.1 million mark was back in 1967.

Although the economic circumstances today are far different than in 1967, the 2021 total can be largely contributed to the disruption in global supply chains and a shortage of semiconductor chips needed to operate today’s vehicles.

Other observations from 2021 include a decline in Canada’s overall vehicle production in North America, which dropped to under 9%. Among the five OEMs with manufacturing facilities in Canada, Toyota led the way in terms of production volume, with 427,056 units, while General Motors of Canada, once a powerhouse of Canadian vehicle production, churned out just 36,465 units.

More investment

Nevertheless, renewed investments in GM Canada manufacturing, including the reopening of the Oshawa assembly plant and a $1 billion investment in the CAMI Ingersoll plant for production of BrightDrop’s electric delivery vehicles indicate that things are looking up.

While the semiconductor shortage is likely to persist for some time, there are signs that Canadian vehicle sales will start to normalize for the next 18-24 months. That being said, the pandemic and supply chain disruptions indicate that in order to be viable long-term, significant changes in Canada’s automotive manufacturing sector, including the way manufacturing and supply chains are managed will need to be instigated, not only to keep with changing legislative, technological and consumer requirements, but also to prevent future supply issues from crippling production.

*Canadian new vehicle sales reached 2,038,798 units in 2017, data courtesy of DAC

 

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