Vehicle shortages predicted to last through summer of 2022

Ron Corbett & George Iny
June 2021

Vehicle inventories are way down in 2021, with strong demand for new and used vehicles and much higher used vehicle prices. COVID-19 has contributed to vehicle delivery shortages that are having ripple effects across the auto industry. The pandemic forced temporary closures at auto plants last year, with the Korean carmakers seemingly suffering the fewest consequences. And then computer chip manufacturers saw their production cut by pandemic restrictions and a fire at a major supplier.

When COVID-19 hit North America in spring 2020, the automakers were more concerned about a collapse in consumer demand for new vehicles than the security of their supply. The automakers expected a repeat of the 2008 financial meltdown when customers stayed out of the market for the next two years. But things went differently this time. Generous government support kept businesses open and put money in consumers’ pockets. If you’re not in one of the hard-hit sectors like restaurants and personal fitness, there’s a good chance you have more liquidity than at the same time a year ago. And with travel and entertainment curtailed, people are more likely to consider replacing a vehicle.

If you’re waiting for a new vehicle, start with the mindset to expect surprises and be patient with the seller. In most cases, delays are beyond their control. Commercial pickups and delivery vehicles will be very hard to find for the next 9-12 months, and prices of used examples are sky-high.


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Here’s what you can do to ease your way into a new vehicle in 2021:

  • Start looking early if you’re a lease customer, so you don’t get jammed in the last month.
  • With the manufacturer’s permission, you may be able to extend your lease from three to six months while you wait for your new vehicle to come in.
  • Buying out your lease and staying off the market is a good strategy.
  • If it’s viable, consider performing maintenance on your current vehicle and staying out of the market until December, or longer.
  • Your leased vehicle may be worth much more than its end value in the contract, particularly if it’s a pickup truck. The APA may be able to help you keep some of the upside using our network of recommended dealerships and an appraisal for buyers in the Greater Toronto market.
  • Give preference to a vehicle already in the dealer’s inventory or in transit, and consider being more flexible on features and trim levels. (Colour is sometimes a tricky compromise, as that is an element that is plainly visible every time you look at your vehicle.)
  • If you’re in the used car market, would you consider a compact or mid-size sedan instead of an SUV? Sedans, even luxury models that were once aspirational, have seen their values spike much less than SUVs and the supply is better.
  • If you have a friend or relative with an older vehicle sitting in limbo, now is the time to take it out of storage because prices have never been higher. Even if it won’t run at all, it’s probably worth selling now, as scrappage values are at record levels – up to $500 for a compact car with its original catalytic convertor. The APA has agreements with used car dealers in Greater Toronto and Montreal to evaluate a stored vehicle and help you prepare it for sale, or buy it from you.



To help you navigate the marketplace, APA’s Staff Writer Ron Corbett prepared this roundup on the vehicle inventory situation with new cars for some popular brands shopped by APA members.



What’s Selling: Anything dealers can get a hold of. Some dealers ordered big in A5 hatch and Q5 and have good inventory so far. The large Q7 3-row SUV is selling quite well but supply is tight. People like it for its very nice drive and luxury, with less of the plutocratic social connotations of a Mercedes. One dealer noted there are rumours swirling around about a luxury car tax; some buyers think they know something is coming and are pulling their purchases forward.

Hard-to-find: Big demand for super high-end stuff, including the Q8, SQ8, RSQ8, RS6, RS7. Can’t guarantee a delivery date. Hoping it will be three to four months but dates are not definite.

How the market has changed: Quite a few late 30s professionals have bought houses out of town and are coming into the car market for the very first time. They have the income and a taste for luxury, and are buying Audis as a first vehicle. Returning clients have been moving up a trim level or even to a bigger model. Volumes are down about 20 percent, but increasing steadily from a year ago. Dealer grosses are up but low supply is a concern. Tire kickers are not a factor now.

COVID & Computer Chips: Chips are an issue for production scheduling. COVID-19 dislocations are over but the fallout from lost production is still being felt. Some shoppers are concerned about catching COVID-19, so the dealer is doing more home deliveries and more home test drives. Other customers still want the dealer experience, including a test drive.



What’s Selling: The F-150, Edge, Escape, and Bronco Sport are all selling well. The EcoSport is dead. The Mustang sells in steady, low numbers with no availability issues.

Hard-to-find: The three-month window seems to be where a factory order will come in. Dealers who pre-ordered big when they had the chance to do so have been rewarded with inventory when other dealers had none. Pickups, the Edge, Escape, and the current and upcoming Broncos are all backordered.

How the market has changed: Closing ratios and grosses are up but sales volume is down due supply restrictions. Overall business is down a bit from two years ago. Pro-active dealers pulled ahead quite a few leases when product was available and got people into their new cars smoothly. There are few tire kickers now. People are entering dealership with intent.

Unlike some makers that shuttered plants, Ford keeps building vehicles with missing electronics and is stockpiling them for the day their chips will come in.

Buyers sense the precarious nature of the supply and are willing to alter their wish lists to secure an already-built vehicle. People are still going for the same vehicle, like an F-150 XLT, but appear to be spending a bit more than previously as they have fewer alternatives to spend their money. Typical upgrades are a sunroof or upgraded infotainment system. A lot of effort is being made to match customers to what is on the ground or confirmed as coming.

COVID & Computer Chips: In Ford’s case, the chip problem seems to have outweighed COVID-19 by a large margin.


General Motors

What’s Selling: Silverado/Sierra, Colorado/Canyon, Trailblazer, Equinox/Terrain

Hard-to-find: Pickup orders face massive challenges. There is little inventory on the ground for the full-size Silverado and Sierra, and four-to-eight-month delays for orders. Most pickups are pre-sold before they have left the factory. Production of the Colorado/Canyon intermediate pickups is also heavily impacted by microchip issues at the plant, with no improvement expected until the third quarter of 2021. The small Trailblazer SUV which is currently assembled in Korea at reduced capacity, has a two-to-three month delivery wait.

Customers looking for a compact Equinox/Terrain SUV will find one, but can’t be picky. The assembly plant for the Equinox is shut through June with little inventory in the pipeline. The Terrain plant in Mexico is still building vehicles but inventory is tight. The Cadillac XT4 plant is closed for a couple of months until June, but inventory is available if you’re flexible on features.

How the market has changed: Dealer margins are up but the lack of inventory is preventing or delaying sales to an extent that revenues are down. People are keen on buying if they enter the dealership. People are doing a lot of research online and arrive with their wish list which they quickly discover is not going to be realized. Buyers are settling for what they can get. Some are deciding to sit things out for six to twelve months until the product delivery crisis is over. GM’s high-value pickups with high margins are helping, but higher operating costs and lack of availability of mainstream product including the Equinox and Trailblazer are reducing volume and overall income.

COVID & Computer Chips: The 2021 disruptions are all related to computer chip supply.



What’s Selling: Honda is essentially a two-vehicle company in Canada, with sales dominated by the Civic and CR-V. The CR-V and outgoing Civic are in good supply and should be until the end of June or a bit later. Supplies may get tight after that, especially if the rollout of the new Civic is delayed.

Sales of several models, like the Passport, Insight and Clarity are moribund.

Hard-to-find: Delivery times for the Odyssey van are two to three months. The Passport SUV is essentially unavailable and generates no interest. The Type R Civic hatchback was a limited edition and is long gone. Honda is concentrating on what sells.

How the market has changed: Dealer margins are up a bit from two years ago and the closing ratio is much better. Tire kickers have disappeared; customers are really serious about buying. The most likely reason for shoppers to not close a deal is that they preferred the Mazda 3 or CX-5 better than the competing Honda after a test drive. Like Toyota, used car sales are strong.

Demand has picked up well again, and is now running close to pre-COVID levels.

COVID & Computer Chips: There have been some dislocations but the situation is not too bad. Honda has been concentrating on its main models, the Civic and CR-V, because they are the ones that matter. There are no chip issues for those vehicles yet. Some low volume models, like the Passport, are receiving less attention, but they were already selling poorly.



What’s Selling: Demand is strong for the Sorento and Seltos SUVs, and the Telluride. The Soul is doing fine. Sales of the Forte compact are slow.

Hard-to-find: The Sorento Turbo has been a challenge since the new generation was introduced; delivery times are about four months. Telluride delivery takes about three months, which is improved over the last year.

How the market has changed: Unlike some other carmakers Kia has maintained its incentives. Tire kickers are way down. Right now people have to book appointments, which discourages those without serious intent.

People are not significantly altering the vehicle or trim they wanted initially. Shoppers don’t appear to be stepping up to a more expensive or larger vehicle because they have extra cash. Volume is up from last year but still a bit down from two years ago.

COVID & Computer Chips: COVID-19 shutdowns impacted supply at the beginning of the 2021 model year. The sticking point now is the microchip shortage



What’s Selling: Everything, but especially the RAV4 SUV. The all-new Sienna had a good launch and continuing demand with delivery times about three months. RAV4 Hybrid delivery times are down to about three months, from a year initially. Supplies of the Highlander, Tacoma and Tundra are OK. The Venza got some interest initially but is not being promoted and demand has stalled. The Corolla still sells but volume has declined from several years ago. Camry sales are also deflating, as buyers move to the RAV. The C-HR is dead.

Hard-to-find: Lots of interest in the RAV4 Prime but Toyota can’t fill orders

How the market has changed: Sales are up over two years ago. People who were intending to get a RAV or a Highlander are sticking with their choices, but may be looking for a higher trim level than they would have two years ago. Sale closing rates are much improved. People don’t want to contact more vendors than they need to and buyers are serious. Two years ago about 30 to 40 percent of shoppers would actually buy; today it is around 60 percent. Dealer margins are up. Tire kickers are gone

COVID & Computer Chips: Neither seem to be an issue for Toyota at the moment. The 2011 tsunami that hit Sendai Japan highlighted a flaw in single-site sourcing when it knocked out Toyota’s sole global source for a paint pigment that was quickly removed from colour palettes worldwide. Toyota elected to diversify a bit so they don’t get caught short. At the moment, Toyota is reported to have at least a four-month supply of chips. Toyota’s production woes predated COVID, the consequence of a botched project implemention with SAP.



What’s Selling: Supply of the main crossover XC models is pretty good, with a three-month delivery window from the factories. The XC40 (from Belgium), XC60 (China) and XC90 (Sweden) are all selling well.

The S-V 60 sedan and wagon are selling OK but their numbers are low, as the market moved toward crossovers. The S90 sedan is moribund. There is a slight concern about a possible delays due to the Suez Canal interruption.

Hard-to-find: Nothing stands out, but a factory order will take about three months.

How the market has changed: This year is a bit down from last year which was down from two years ago. Volvo buyers are usually well-to-do and seem insulated from temporary economic conditions. Buyer intentions haven’t changed; they are still choosing the model and trim level they would have bought pre-COVID, and aren’t trying to save money on the purchase. Dealer margins are solid and there are fewer tire kickers.

COVID & Computer Chips: A combo of both impacted vehicle production. Some factories closed due to COVID-19 outbreaks and some production has been delayed due to the chip shortage.