'Really disappointing,' Microchip shortage impacts local car dealerships

Collingwood, Ont. -

A microchip shortage impacting everything from phones to fridges has also caused a serious inventory issue for car dealerships.

Blue Mountain Chrysler general manager Warren Sly said their stock had significantly diminished.

"Normally from this time of year, we would carry in new vehicles from 100 to 120 new vehicles. Today, we are sitting with 25 new vehicles in stock," Sly noted.

However, Sly said over two dozen new vehicles is a jump from the six they had just a few weeks ago.

"We are starting to see some inventory flow, and we are excited to see that," Sly added.

And while supply chain delays have created a global shortage of semiconductor microchips, leaving car lots empty, consumer demand remains strong.

"Demand for vehicles really shot back quickly, and meanwhile automakers had really curtailed orders for semiconductor chips and other materials to make vehicles," explained Rebekah Young, Scotiabank economist.

Young said vehicle production is down 40 per cent month over month across Canada.

"That's a really disappointing number," she said. "Until they get chips, we are not going to see auto production start to pick up, and until then, we are not going to see more vehicles in lots around the county."

Inventory levels are near zero at Collingwood Toyota, with waits upwards of six months to order a new vehicle.

"We only get the opportunity to order 25 to 30 per cent of what we traditionally would order," said Collingwood Toyota manager David McArthur. "Every week that goes by, the backlog increases and increases."

Experts say things will get back to normal, but it could take a while, with the shortage expected to last well into 2022.